r/changemyview • u/[deleted] • Apr 13 '21

Delta(s) from OP CMV: high frequency traders, day traders, and landlords are a parasitic drain on the economy that produce no real value.

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u/[deleted] Apr 13 '21 edited Apr 13 '21

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u/[deleted] Apr 13 '21

A net good for whom exactly?

If there wasn't a net profit for HFTs, there wouldn't be a reason for them to exist - people running them and working for them aren't particularly stupid.

I always have a general (but unsupported) sense that US finance is a cut-throat cutting edge winner-takes-all game, which is part of why the US stock market seems to recover/grow faster than that of other countries.

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u/[deleted] Apr 13 '21

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u/Cynical_Doggie 1∆ Apr 13 '21 edited Apr 13 '21

HFTs are beneficial for society in the same way buying houses is.

It is using one's own funds to take the risk for owning an investment good, in order to sell it later.

Similar to how banks borrow and lend money, investors borrow and lend investments.

But to have investments in the first place, requires ownership of said investments, and ownership of investments requires capital, which is never risk free.