The difference is critical and involves much more than the duration of each stock position. Investing is a bet that a company or industry will improve its profitability or market share over time. Trading is a bet the stock will rise or fall in the next 10 minutes or hour. Investments can lead to real gains for all shareholders as the market rises, while trades require someone to lose a dollar for every dollar you gain. The institutional day traders are making it.
Somebody has to be making it.
Day traders at Goldman Sachs, to use just a single example, aren't chosen at random. The firm doesn't put billions in the hands of traders who aren't likely to succeed. There is first a process of training and then a process of winnowing. And unlike you and me sitting in our boxer shorts at our trusty PCs, those Goldman boys and girls have entire departments of rocket scientists with supercomputers revving behind them. This is why the National Association of Securities Dealers is considering tightening qualifications and margin rules for day traders, hoping to at least slow the bloodbath before the Securities and Exchange Commission becomes involved.