I think your understanding of the benefit of the stock market is flawed: the length of holding does not impact the fact that you are providing capital to compan

I think your understanding of the benefit of the stock market is flawed: the length of holding does not impact the fact that you are providing capital to companies. The only time money goes from investors to companies is at public offerings (initial or otherwise). All other transactions in shares (be it by long term investors or by high frequency hedge funds) do not benefit the companies directly. But they do provide an indirect benefit: without the existence of these investors (i.e. the secondary market) people would be very reluctant to invest in an IPO as they would be no exit strategy. It is important for people buying in an IPO that the stock will be in demand in the future. The holding period of the people who will buy is irrelevant, the size and level of aggregate demand is not. This being said, I am not arguing that have it is a good thing that the majority of volume is high frequency in nature.