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What the interns have wrought, 2025

blog.janestreet.com

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Re: What the interns have wrought, 2025

#11

Post by logicchains »

plst wrote: post #7
KHRZ wrote: post #2

I was curious what kind of company needed to develop all these different kinds of advanced tech. Turns out it's just so they can be sneaky and trade shares quickly. Kind of sad IMO.

Can someone who actually understands the topic explain to me (or link good resources) why/if what they do is useful to anyone? Or are they literally just in the business of making money? (anyone except themselves of course. I'm serious, any hints of irony are unintended)

HFTs competing with each other at market making lower spreads; the cost retailers/institutions need to pay to enter a position. Prior to algorithmic trading, you might need to pay a whole percentage point or more (100 basis points), now spreads on the most popular products are so tightly quoted that it can cost less than 1 basis point (0.01%) to enter a position.

Re: What the interns have wrought, 2025

#12

Post by doovd »

plst wrote: post #7
KHRZ wrote: post #2

I was curious what kind of company needed to develop all these different kinds of advanced tech. Turns out it's just so they can be sneaky and trade shares quickly. Kind of sad IMO.

Can someone who actually understands the topic explain to me (or link good resources) why/if what they do is useful to anyone? Or are they literally just in the business of making money? (anyone except themselves of course. I'm serious, any hints of irony are unintended)

It's a common rhetoric from someone who has no clue about financial markets (the person you replied to).

Suppose you want to invest in S&p500 so you want to buy the ETF. Someone like Jane Street can create sell you this ETF, and take care of the risk that comes along with it. For example, the price they sell you this ETF should take into account the pricing of underlying stocks. While it sounds trivial, doing this profitably (and therefore sustainably) is a tough job. And doing it competitively to offer you a good price on it is an even tougher job.

Re: What the interns have wrought, 2025

#13

Post by redwood »

hackrmn wrote: post #3

I've not heard of Jane Street, but looking at the site, it seems they're quite the tech-savvy group for an _asset trading_ company. And reading the article, they apparently "trade" (pun intended) in quite a few different things from CSS to OCaml, which is really nice to see for a place that doesn't directly deal with software as their [business] product (or did I misunderstand their market?).

The Economist's take https://www.economist.com/finance-and-economics/2025/06/26/j...

Re: What the interns have wrought, 2025

#14

Post by dn97 »

plst wrote: post #7
KHRZ wrote: post #2

I was curious what kind of company needed to develop all these different kinds of advanced tech. Turns out it's just so they can be sneaky and trade shares quickly. Kind of sad IMO.

Can someone who actually understands the topic explain to me (or link good resources) why/if what they do is useful to anyone? Or are they literally just in the business of making money? (anyone except themselves of course. I'm serious, any hints of irony are unintended)

the premise here is that market makers and arbitrageurs are crucial for efficiently allocating capital. enabling sellers to sell to the highest bidder and buyers to buy from the cheapest vendor means less capital wasted(?)

in my experience Jane Street make no attempt to defend the financial system; such societal benefits are obvious or implicit.

whether you (or they!) really buy that is irrelevant

Re: What the interns have wrought, 2025

#15

Post by monospacegames »

doovd wrote: post #12
plst wrote: post #7

Earlier quoted context omitted.

Can someone who actually understands the topic explain to me (or link good resources) why/if what they do is useful to anyone? Or are they literally just in the business of making money? (anyone except themselves of course. I'm serious, any hints of irony are unintended)

It's a common rhetoric from someone who has no clue about financial markets (the person you replied to). Suppose you want to invest in S&p500 so you want to buy the ETF. Someone like Jane Street can create sell you this ETF, and take care of the risk that comes along with it. For example, the price they sell you this ETF should take into account the pricing of underlying stocks. While it sounds trivial, doing this pr…

Is that why they got banned in India recently? Because they were too good at offering complex financial instruments to customers at competitive prices?

Ultimately companies like Jane Street have no moral rudder and it is a waste of talent for smart young people to work for them, but we are so far beyond such considerations at this point that it sounds naive to even suggest that maybe talented people should work on things that make society better for everyone and care about the moral implications of their work. Instead everyone is looking for a way to contribute to the coming dystopia in whatever way they can because that's where the money is.

Re: What the interns have wrought, 2025

#16

Post by infecto »

plst wrote: post #7
KHRZ wrote: post #2

I was curious what kind of company needed to develop all these different kinds of advanced tech. Turns out it's just so they can be sneaky and trade shares quickly. Kind of sad IMO.

Can someone who actually understands the topic explain to me (or link good resources) why/if what they do is useful to anyone? Or are they literally just in the business of making money? (anyone except themselves of course. I'm serious, any hints of irony are unintended)

Market makers or other similar HFT are providing liquidity in an efficient manner to the markets. The benefit is often debated but for the majority of retail and institutional investors, spreads have never been lower. Instead of a guy at the floor swallowing large margins up, you have bots electronically vacuuming pennies.

Of course the whole point for a firm like Jane Street is to make money. To make money means they are competing with someone and that someone could be a loser depending on the scenario.

My own opinion, most folks don’t like market makers or folks who work in financial markets are simply not well informed. The efficient allocation of capital is a valuable service to humans in a capitalist society. People often forget how wide spreads were in the past and that humans were swallowing that margin up with little competition. Now market making is highly competitive and because of it investors both small and large benefit from it.

Re: What the interns have wrought, 2025

#17

Post by Shacklz »

doovd wrote: post #12
plst wrote: post #7

Earlier quoted context omitted.

Can someone who actually understands the topic explain to me (or link good resources) why/if what they do is useful to anyone? Or are they literally just in the business of making money? (anyone except themselves of course. I'm serious, any hints of irony are unintended)

It's a common rhetoric from someone who has no clue about financial markets (the person you replied to). Suppose you want to invest in S&p500 so you want to buy the ETF. Someone like Jane Street can create sell you this ETF, and take care of the risk that comes along with it. For example, the price they sell you this ETF should take into account the pricing of underlying stocks. While it sounds trivial, doing this pr…

> It's a common rhetoric from someone who has no clue about financial markets (the person you replied to).

I think what OP meant is that producing all this fancy advanced tech just to play the financial game isn't all that much benefit for society.

And when looking at societal development in the last couple of decades with the increasing gap in distribution of wealth, social mobility and overall life expectancy declining and other such metrics, I think it's a valid standpoint that maybe, the collective smarts of our society could be allocated a bit better than putting them into companies like Jane Street; as impressive as their work is.

Re: What the interns have wrought, 2025

#18

Post by looperhacks »

monospacegames wrote: post #15
doovd wrote: post #12

Earlier quoted context omitted.

It's a common rhetoric from someone who has no clue about financial markets (the person you replied to). Suppose you want to invest in S&p500 so you want to buy the ETF. Someone like Jane Street can create sell you this ETF, and take care of the risk that comes along with it. For example, the price they sell you this ETF should take into account the pricing of underlying stocks. While it sounds trivial, doing this pr…

Is that why they got banned in India recently? Because they were too good at offering complex financial instruments to customers at competitive prices? Ultimately companies like Jane Street have no moral rudder and it is a waste of talent for smart young people to work for them, but we are so far beyond such considerations at this point that it sounds naive to even suggest that maybe talented people should work on th…

They got banned because they were accused of pretty bad market manipulation (which Jane Street denies of course)

Re: What the interns have wrought, 2025

#19

Post by rufus_foreman »

plst wrote: post #7
KHRZ wrote: post #2

I was curious what kind of company needed to develop all these different kinds of advanced tech. Turns out it's just so they can be sneaky and trade shares quickly. Kind of sad IMO.

Can someone who actually understands the topic explain to me (or link good resources) why/if what they do is useful to anyone? Or are they literally just in the business of making money? (anyone except themselves of course. I'm serious, any hints of irony are unintended)

What use was it to anyone when Gerolamo Cardano devised the rules of probability in order to win at gambling?

Re: What the interns have wrought, 2025

#20

Post by fHr »

Shacklz wrote: post #17
doovd wrote: post #12

Earlier quoted context omitted.

It's a common rhetoric from someone who has no clue about financial markets (the person you replied to). Suppose you want to invest in S&p500 so you want to buy the ETF. Someone like Jane Street can create sell you this ETF, and take care of the risk that comes along with it. For example, the price they sell you this ETF should take into account the pricing of underlying stocks. While it sounds trivial, doing this pr…

> It's a common rhetoric from someone who has no clue about financial markets (the person you replied to). I think what OP meant is that producing all this fancy advanced tech just to play the financial game isn't all that much benefit for society. And when looking at societal development in the last couple of decades with the increasing gap in distribution of wealth, social mobility and overall life expectancy decli…

That is true but capitalism sadly encourages the more profit the better. With making less and less in traditional research jobs for example and rising costs, this positions come more attractive by the second. It is sad to see.
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