Welcome to the Traders Laboratory.

Trading and the Markets General trading forum. Anything related to trading and the markets goes here.

Like Tree10Likes
Old 06-28-2011, 04:05 PM   #1

Join Date: Apr 2010
Posts: 1,405
Ignore this user

Thanks: 204
Thanked 530 Times in 271 Posts

Speculators Are Useless to Society

A few of us here are debating whether 'speculation' is useless, as it serves no useful function to society .With most "normal jobs' you produce either a product or a service. But the act of speculation produces nothing as it does not add anything useful to society.

My thoughts are even though speculation seems to produce nothing, it is actually providing a means for other companies to provide products and jobs, like the brokers, software vendors, etc. And then we can add all the taxes we pay.

So bottom line, because we speculate non-speculators does benefit. Tell me what you think?

Traders Laboratory is 100% Free due to our generous ad sponsors.
Be sure to support them - they support Traders Laboratory!

Featured Brokers include:

Featured Services:
INO Trading Course
MadMarketScientist is offline  
Reply With Quote
The Following User Says Thank You to MadMarketScientist For This Useful Post:
gabe (07-01-2011)
Old 06-28-2011, 04:24 PM   #2

Join Date: Oct 2007
Location: Tuebingen
Posts: 18
Ignore this user

Thanks: 8
Thanked 3 Times in 2 Posts

Re: Speculators Are Useless to Society

As speculator one fulfills at least two social functions that would otherwise be shunned very strong:

Take risks that others would not take.

Tolerate uncertainty that others would not endure.

So in total they provide liquidity for the great process of economic (positive or negative) critic.

My two cents.

wunderlich is offline  
Reply With Quote
Old 06-28-2011, 04:27 PM   #3

Tams's Avatar

Join Date: Sep 2008
Location: Geelong
Posts: 4,052
Ignore this user

Thanks: 2,275
Thanked 1,666 Times in 1,010 Posts

Re: Speculators Are Useless to Society


some people call themselves "Liquidity Provider".
Arguing with a troll is a lot like wrestling in the mud with a pig, after a couple of hours you realize the pig likes it.
Tams is offline  
Reply With Quote
Old 06-28-2011, 05:08 PM   #4

UrmaBlume's Avatar

Join Date: Apr 2008
Location: Las Vegas
Posts: 718
Ignore this user

Thanks: 88
Thanked 636 Times in 261 Posts

Re: Speculators Are Useless to Society

Originally Posted by Tams »
. some people call themselves "Liquidity Provider".
Very well said Tams.

Speculation provides the liquitidy with out which corporations would not be able to raise capital in the capital markets and withou which both suppliers and users would not be able to hedge in the commodity/interest rate/currency markets.

Without speculation the markets could not fulfill their function and without the markets there would not be much of an ecconomy.
UrmaBlume is offline  
Reply With Quote
The Following User Says Thank You to UrmaBlume For This Useful Post:
GoldStandard (07-02-2011)
Old 06-28-2011, 06:49 PM   #5

TheNegotiator's Avatar

Join Date: Mar 2009
Location: London
Posts: 3,241
Ignore this user

Thanks: 351
Thanked 738 Times in 565 Posts

Re: Speculators Are Useless to Society

Isn't speculation a function of efficient market theory? If there is a window of opportunity for people to capitalise on something then they will. The window then disappears. The market then becomes more efficiently priced.

Anyway, aren't all traders effectively speculating?


Sovereign Debt Yield Spreads

To contribute is to learn. Don't be that student who always sits at the back of the class.

Day Trading the E-mini Futures
- Discussing and trading the E-minis every day!

Bigger Picture in E-minis Discussion
- Tryin' to see the wood for the trees ;)
TheNegotiator is offline  
Reply With Quote
The Following User Says Thank You to TheNegotiator For This Useful Post:
Ingot54 (06-29-2011)
Old 06-28-2011, 09:27 PM   #6

clmacdougall's Avatar

Join Date: Jan 2009
Location: halifax
Posts: 487
Ignore this user

Thanks: 211
Thanked 197 Times in 141 Posts

Re: Speculators Are Useless to Society

What isn't speculation? Who isn't speculating? Many people in the trades work without knowing if their going to get paid in full or at all for their work when finished. Banks give out loans based upon the probability of repayment. Corporations sign contracts with the belief that their fixed costs won't change dramatically, when in fact they could.
There is no such thing as a job or position that is secure and if you think there is just ask Richard Nixon or any professional athelete who's on the verge of being replaced by a hot rookie.
Trading is an admiral pursuit because knowingly or not you fascilitate an efficient market and if you're good than you're on the right side of that market most of the time.
clmacdougall is offline  
Reply With Quote
Old 06-28-2011, 10:20 PM   #7
Sky Blocks Champion

SIUYA's Avatar

Join Date: Apr 2010
Location: a city of canals
Posts: 2,222
Ignore this user

Thanks: 606
Thanked 926 Times in 638 Posts

Re: Speculators Are Useless to Society

If I open a shop selling pencils I buy for 80cents to sell for $2.00 - i am not speculating, I am receiving a margin for providing ready access to a supply of pencils.
insurance companies - most of the time our house wont burn down.....,
gaming companies - they provide a venue for the entertainment dollar dont they ,
lawyers - where do I start
farmers - why cant we grow our own food in pots and small plots instead of subsiding people who speculate on the weather, food is such a vital part of society it should not be allowed to be in the hands of such speculators - lets privatize it ? (ps...I am a farmers son)

I am in agreement with UB and Tams and figure most people here will agree.
Speculation is about providing liquidity - and feeding brokers of course!

(Negotiator - I think you are pushing arbitrage opps more - free money is not speculating )
SIUYA is offline  
Reply With Quote
Old 06-29-2011, 03:09 AM   #8
Blocks_2 Champion, Gnome pinball Champion, Collapse Champion, SuperMario Rampage Champion, Arkadium Skeeball Champion, Bozzle Champion, JezzBall Champion, Galaga Space Invaders Champion, Jurassic Pinball Champion, Zulu Gems Champion, Marble Motion Champion, Colour Chain Game Champion, Eye Drops Champion, Blocks Champion, Pinboliada Champion, Block Champion, Bubble Elements Champion, Festival Pinball Champion, Pinball King Champion, Cold Fusion Champion, Mario Kart Extreme! Champion, Crazy PinBall Champion, 7up Pinball Champion, National Treasure Pinball Champion, Cloud Breakout Champion, Crystal Island Champion, HotRod Pinball Champion, Zuma Kowloon Champion, Skee Ball Champion, Bomb Jack Champion, Blocks 2 Champion, Pepsi Max Pinball Champion, Dynomite Champion

jpennybags's Avatar

Join Date: Jun 2011
Location: Kansas
Posts: 503
Ignore this user

Thanks: 146
Thanked 75 Times in 69 Posts

Re: Speculators Are Useless to Society

My benefit to society... I pay taxes, donate to the Salvation Army, and vote. I lend a hand to my neighbors when needed. The lawn gets mowed once a week. I don't abuse credit, and my bills get paid on time.

The subject of "occupation" comes up in small talk occasionally. I'm at a loss to tell folks what I do sometimes. Many times I get the... "so then, you don't really have a job"... or worse yet... "yeah, right" (these are comments not expressed so much in words, but more in attitude). The other side of it is... "what's hot right now"... or they want to talk about some investment they made money on in the past... more often though... "the one that got away"... which is fine by me.

When I was starting out, I gave the most socially acceptable answer that I could... "I'm between jobs right now". I still revert to that answer sometimes... depends on my mood, and whether or not I expect to see you again. It used to be so easy... "I'm a candle stick maker". Others can relate to having a job with a title, a boss, and a place to go every day... "candles are good... I like candles".

Bottom line... I'm a leach, but I'm OK with that.
Ingot54 likes this.
jpennybags is offline  
Reply With Quote


Thread Tools
Display Modes Help Others By Rating This Thread
Help Others By Rating This Thread:

Similar Threads
Thread Thread Starter Forum Replies Last Post
Leukemia Lymphoma Society & My Amazon Links brownsfan019 The Candlestick Corner 0 06-22-2009 07:43 PM
Leukemia & Lymphoma Society Fundraiser 2008 brownsfan019 The Candlestick Corner 2 10-28-2008 03:21 PM
Why technical indicators are useless in trading Soultrader Beginners Forum 4 08-13-2007 09:30 AM
TRIN - useless notouch Technical Analysis 7 02-15-2007 07:45 AM
Newbie: selling shares from former Building Society Penny Less Beginners Forum 2 09-27-2006 11:02 PM

All times are GMT -4. The time now is 03:05 PM.
Copyright ©2000 - 2018, Jelsoft Enterprises Ltd.
CS to VB integration by DeskLancer
2006-2011 Traders Laboratory, All Rights Reserved.