Though day traders represent less than 1 percent of all investors, they account for 15 percent of the volume on the NASDAQ exchange -- their main playground.
In a world where long-term investment is measured in seconds, all that buying and selling can send shock waves through the markets.
Scott Bleier, a market strategist for Prime Charter Ltd., a major brokerage firm, says short-term speculation is as old as the market. What's different now is that technology has given day traders the tools to make hundreds of transactions a day.
Internet stocks in short supply are a favorite target of day traders. "It's creating tremendous levels of volatility in individual issues," says Bleier.
"When everybody wants to buy them, it's like an elephant going through a door," he says. "Everybody wants the same thing at the same time. Nobody's got it and it drives the stock price way up."
Who gets hurt? Individuals who get sucked into the frenzy created by day traders and buy those so-called momentum stocks looking for long-term investment.
"You can profit from them by knowing the game," says Bleier. "If you know the game, you make sure you're in and you're out."
And if you don't know the game? "If you don't know the game, you shouldn't play," Bleier says, "because you're gonna lose and you're gonna lose fast."