At least for regular stock exchange, I can see why they&#x27;re necessary (although it took me an embarrassingly long time, given my profession, to figure this out). When a company does an IPO, they&#x27;re raising capital. All good and productive there. Why do people buy stocks? Two reasons: for a share of the company income (dividends) and to make a windfall gains when the company grows by selling the stock (capital gains).<p>If you&#x27;re in it for the second reason, you wouldn&#x27;t buy the stock if you know there isn&#x27;t someone else to sell it to in future. The second buyer needs a third buyer, the third need a fourth and so on. And presto. Stock market.<p>CDOs and other synthetics are a little more questionable. Some arguably lower stock market transaction and search costs: derivative markets provide a source of information that allows stocks to be efficiently priced. Other instruments like CDSs allow risk to be spread and hedged throughout the economy (which in some cases is efficient, particularly if at least some people have risk averse utility functions).<p>But I&#x27;m still learning; I&#x27;m a little allergic to finance in general. HFT just seems like cheating to me and adds uncertainty to other transactions. But maybe there&#x27;s some good argument out there (and feel free to enlighten me if you have one).<p>All that aside, I personally have much more respect for &#x27;the makers&#x27; than &#x27;the ticket clippers&#x27; :)