Lots of money flows into the accounts of these “traders”. Where does this money come from? They aren’t producing a product.
I am admitting ignorance here but I think it’s a question worth pursuing.
The money is made by front-running the market. The HFT traders are wired into the exchanges in such a way that they can see orders coming into the exchanges before other clients of the exchange can see them. The HFT’s can “paint the tape” such that other traders see an order flow that will not exist in a sub-second time, and thereby they can gain an advantage of mere fractions of a cent on the actual price at which the orders are filled.
Multiply this by millions of trades per month and you get a steady fleecing of the customers of the exchange.
The supposed quid-pro-quo that the HFT’s are offering to the exchanges is “liquidity” or “market depth.” The “flash crash” of 2010 showed that the HFT’s flee at the first sign of real trouble in the markets - so much for their promises of market depth.