Are stock market traders more like punters?

Most people tend to equate traders with short-term punters who are in the market purely to make money. Like investors, traders too are in the market to make money but remember there are a method and a larger purpose of trading. You will be surprised to know that markets cannot function without the active participation of traders. In fact, stock market traders are the key to price discovery and also to ensure liquidity and reduce the risk in the stock markets. Contrary to what most people believe, traders have a very important role to play in markets. In fact, markets will not be as robust and efficient than they are today had it not been for the traders. They not only provide liquidity but also ensure that the short-term cues on the macroeconomic and micro front are factored into prices. After all, that is what a healthy market is all about!