The way the market works is that there are people who want to buy liquidity (the buy side) and people that are willing to sell that liquidity to them (the sell side).
It doesn't refer to buying or selling lots but rather initiating/fulfilling orders regardless of side.
The buy side are typically pension or hedge funds that act based on predictions they have about the future to maximize long-term the value of their portfolio.
The sell side are either banks or specialized HFT firms that only know the instantaneous price of things and their short-term correlations (and not how they might evolve long-term), whose goal is to collect the difference between bid and ask price, tabling on the fact they can sell back their inventory to someone else before the price goes against them. They expose themselves to the risk that price moves before they can do that, and the difference in price between the bid and ask reflects that uncertainty.
The sell side is essential for the buy side to function, and the competition between them leads them to them providing the tightest possible margins and therefore the best price for investors.
The HFT players provide the tightest prices by being very fast to react to market changes and get out of their risk, which is why it's highly technology-driven.
Thinking they have no value shows lack of understanding of market dynamics. Without HFT firms, investors would just be paying large commissions to banks instead.
The buy side are typically pension or hedge funds that act based on predictions they have about the future to maximize long-term the value of their portfolio. The sell side are either banks or specialized HFT firms that only know the instantaneous price of things and their short-term correlations (and not how they might evolve long-term), whose goal is to collect the difference between bid and ask price, tabling on the fact they can sell back their inventory to someone else before the price goes against them. They expose themselves to the risk that price moves before they can do that, and the difference in price between the bid and ask reflects that uncertainty.
The sell side is essential for the buy side to function, and the competition between them leads them to them providing the tightest possible margins and therefore the best price for investors.
The HFT players provide the tightest prices by being very fast to react to market changes and get out of their risk, which is why it's highly technology-driven.
Thinking they have no value shows lack of understanding of market dynamics. Without HFT firms, investors would just be paying large commissions to banks instead.