tradersboredom, I agree with all you said, except for one thing - winning traders, speculators, hedge funds and active mututal funds, do not get paid for providing liquidity to the markets. Because losing traders also provide liquidity but they don't get anything, only losses...
We do create value. As was pointed out...and I think this is the best answer...we provide capital at risk in order to create a market. The value derives from the market, of which we are all participants and contributors.
I've come to the inescapable conclusion that some people will eagerly argue about literally anything.
No, it's a zero sum game, so no value is created. If there is someone with money to invest, and someone who needs money to spend, they both meet on the stock exchange and make a deal. When enough people meet a fair price is achieved on the auction principle. The buyer of stock receives dividends from the company whose stock he has bought. This is his compensation and this is not a zero sum game as long as the company is creating value in the real economy and distributes its profits as dividends. Any short-term speculative activity however represents bets on the price of the stock and is a zero sum game. Winners simply steal the money from the losers.
best description for a trader: "daddy makes his millions by taking crumbs from other people's cakes" can you name the movie? no cheating with google plz!