I am more ignorant than anyone on this subject, I too have similar questions on the stock market as a whole, not just traders. Originally, stock market was created to raise large amounts of capital for big projects/companies. Once the IPO is done, people keep buying and selling stocks - how does it benefit anyone other than the seller who makes a profit? It doesn't add extra capital to the company, doesn't "create" anything (physical, digital or otherwise). Maybe this question is really dumb, but I really can't understand why traders (and other wall streeters) are paid so much
> Once the IPO is done, people keep buying and selling stocks - how does it benefit anyone other than the seller who makes a profit?
The IPO (initial public offering), isn't necessarily the stocks only public offering, so the trade of stock on the market provides the firm the capacity to raise additional capital via further public offerings. (The demonstrated ability of the firm to do this may also influence its ability to raise money through other financing means.)
Investors will generally only be keen to buy into an IPO if they know that there is the possibility of selling the stock in the future in an open market.
