Wednesday, March 9, 2011

How do salaried stock traders (day traders) benefit society?

For every person taking a position on a stock, there must be someone exiting that position. Either way, someone loses. I mean if I buy a stock from someone today at $40 and it goes up to $50 by tomorrow, I've made $10 while the other person lost the opportunity to make $10. Same thing goes for anything from options (writing a call vs. buying a call--someone necessarily loses from this contract, only the clearing house/broker gains regardless) or CDSs or any other security or derivative. Sooo if you're a successful trader, sure you make money for yourself, but for most of the money you earn, someone will lose most of that amount or lose the opportunity to earn it. So how do traders benefit society? Although I'm studying to work in finance myself, I believe that these traders would do more good shoveling snow or building something, as controversial as this is lol. Is there something wrong with my logic? Thx

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