So I was checking out Bitstamp, and I see this automated buying and selling of 0.03 Btc almost continuously. What is the point of that? Won't the trading charges offset any gains? Or, is it some automated system managed by bitstamp to generate volume? Any ideas?
You might be right about that, Bitstamp has dropped below the top five exchanges for volume a few times. They might have decided to start buying and selling to themselves to ensure they stay in the top five. Bitstamp wouldn't pay any trading charges so it wouldn't cost them anything.
its not because the volume, bitstamp itself has an arbitrage opportunity because of their fees they charge the seller and the buyer.
because of their fees they pay 0.25 % less when they buy and get 0.25% more for each bitcoin they sell.