> Lol, as opposed to all the other actors in the economy who provide a service.
I see what you mean and there may not even be a visible difference from outside.
But I think there's a big difference between "I'm going to make money getting grocery products as cheap as possible and selling them as high as local market can handle it" and "I'm going to open a grocery store in an area which doesn't have it yet and make money providing products to people". Effectively they're the same and some people may think of it as the first case.
I just don't believe anyone doing HFT cares one bit about the rest of the market. They are in it to make money. It just happens to lower the spread. If there was a way to do it by making the spread larger and pissing everyone else off, they'd still do it.
Different example in real life in some countries - homeless people collecting glass bottles from the street so they can return them and get some change back in countries where recycling cost is added to the price by default. You're paying for it when you're buying a drink and not returning the bottle yourself. They get money for cleaning the street. But it just happens to be connected - I wouldn't say you're paying the homeless for the street cleaning service.
> I wouldn't say you're paying the homeless for the street cleaning service.
I certainly would. Are you arguing just because the government is interposed in the process that it is no longer a service you are paying for?
Ok, let's try a different angle. Imagine a world where financial markets aren't electronic and brokers don't exist. You have 5 Apple shares that have a fair value of $500. The only way to sell your shares in this fantasy world is to physically find someone who wants them. Maybe you call people on the phone, maybe you spam some e-mails. You get the full $500 if you find a buyer, but it takes labour and time. The labour is costing you, since you could be doing something productive that you are more skilled at. And the time is costing you, because you want the $2500 now to pay the rent, and if Apple shares plunge you could be in trouble!
So I, for the first time ever, get the idea to set up a lovely looking shop on the corner and offer to buy them from you for $499 each, and I'll handle the rest. You come in with your share certificate, we shake hands, make small-talk, exchange money. Surely you agree this is a service?
So I am slightly baffled. All that has changed is that the process outlined above has been made electronic, and now you claim it isn't a service? Do shops selling shit on ebay no longer qualify as services?
I see what you mean and there may not even be a visible difference from outside.
But I think there's a big difference between "I'm going to make money getting grocery products as cheap as possible and selling them as high as local market can handle it" and "I'm going to open a grocery store in an area which doesn't have it yet and make money providing products to people". Effectively they're the same and some people may think of it as the first case.
I just don't believe anyone doing HFT cares one bit about the rest of the market. They are in it to make money. It just happens to lower the spread. If there was a way to do it by making the spread larger and pissing everyone else off, they'd still do it.
Different example in real life in some countries - homeless people collecting glass bottles from the street so they can return them and get some change back in countries where recycling cost is added to the price by default. You're paying for it when you're buying a drink and not returning the bottle yourself. They get money for cleaning the street. But it just happens to be connected - I wouldn't say you're paying the homeless for the street cleaning service.