Trading firms create value by providing liquidity.
If they can buy low and sell high, they will be buying when there are relatively fewer other buyers, and sell when there are relatively few other sellers.
This activity creates value for other people who want to trade in those circumstances.
If no value was created, there would be no value to capture.
And the prima facie evidence that they are creating value is that they are capturing value from willing market participants.
If they can buy low and sell high, they will be buying when there are relatively fewer other buyers, and sell when there are relatively few other sellers.
This activity creates value for other people who want to trade in those circumstances.
If no value was created, there would be no value to capture.
And the prima facie evidence that they are creating value is that they are capturing value from willing market participants.
This is fundamental economics.