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Understanding Jane Street

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Re: Understanding Jane Street

#131

Post by nharada »

j7ake wrote: post #77

Regarding the last point in working at Jane Street versus research on fusion/cancer: You could maximise more good by first working at Jane Street in your 20s, retire by 30, and then set up your own smal fusion/cancer research lab where you can do research without being tied to government funding and politics. By 30, many cancer researchers have barely finished their PhDs, so you won’t actually be that far behind scie…

"Make a ton of money and donate it all" is an impactful way to maximize good.

It's also something that people almost never seem to execute, usually it ends with "make money and donate a small amount of it".

Re: Understanding Jane Street

#132

Post by nly »

julianeon wrote: post #32

Something I don’t understand: Why haven’t their gains been arbitraged away? Conceptually what they do seems simple enough; and presumably you just need capital to do it. Hell, their own former employees could theoretically compete against them - as could many traders who would pay to learn those strategies. So why are they still making so much? I don’t understand why their “advantage” hasn’t been arbitrated away into…

It's not just like you can just have a few hundred lines of secret sauce implemented in Python and then go and fill your boots.

The costs of maintaining a trading platform are very high. You have to be colocated with brokers/exchanges, and have a full market data and trading platform optimized down to microseconds. You need a large data and processing farm to backtest your algos. You need the legal structure to dodge all the tax. You need access to lots of GPUs and FPGAs to train your models and execute fast.

Re: Understanding Jane Street

#134

Post by mgaunard »

Gene_Parmesan wrote: post #125
mgaunard wrote: post #111

Quite a few inaccuracies in there. The ones that jump at me: - OCaml does type inference, so you don't actually declare the types and have the compiler check them, as stated in the article. - Investors are not market-makers, the two words actually refer to the two types of opposed participants in the market. - OCaml is the language used for research, but they actually have a lot of developers working on the compiler…

Yes, it uses ML-style type inference, but that doesn't mean you are literally unable to annotate types, and the compiler is absolutely still doing type checking. I'm sure people like Jane Street annotate everything. In addition, perhaps a small point relative to the first, but in Ocaml, the arithmetic operators perform no type inference; there's a separate operator for float-addition versus int-addition, and so on. T…

That is not the idiomatic way to use OCaml, so I wouldn't assume they do that.

Re: Understanding Jane Street

#135

Post by josu »

scajanus wrote: post #117
bibabaloo wrote: post #92

From the article: > One example of this is NAV trading (Jane Street has a paper here), where an investor wants to place a large trade in an ETF and agrees to buy it at some future point at whatever its net asset value is, less some small fee. Should this say "agrees to buy it at some future point at whatever its net asset value is *NOW*"? Otherwise, I'm confused, why wouldn't the investor just buy it later?

Edit: if you remove the second 'at' it makes sense. I think they mean that the buyer will agree to pay $5000 now for say 10 shares (close to current valuation), and get it in a week regardless if they will be worth $0, $5000 or $100000 at that point. They would prefer to buy it now, but can't, and thus are willing to pay a fee to make it happen. However, the motivation (and pricing) is different from futures trading:…

No, the original statement is correct. Page 3 of the linked paper has a diagram.

https://www.janestreet.com/wp-content/themes/janestreet/pdf/...

Re: Understanding Jane Street

#136

Post by amelius »

pyb wrote: post #121
j7ake wrote: post #77

Regarding the last point in working at Jane Street versus research on fusion/cancer: You could maximise more good by first working at Jane Street in your 20s, retire by 30, and then set up your own smal fusion/cancer research lab where you can do research without being tied to government funding and politics. By 30, many cancer researchers have barely finished their PhDs, so you won’t actually be that far behind scie…

By now, finance and FAANG have minted a very large number of tech millionaires. So, in practice, you have you ask yourself why ~nobody has actually done what you say. Personally I don't think it's because of a lack of funds.

Bill Gates?

Re: Understanding Jane Street

#137

Post by SilverBirch »

>the winners get a job from which people routinely retire rich in their 30s, and the losers... don't

Honestly, I find this ridiculous. Firstly, Yes, working at Jane Street is a well paying job and you'll do well out of it. No. People aren't routinely retiring in their 30s. I don't understand where this absurd idea comes from. Look at all the rich people in the world, look at how old they are, and ask, are they retired? No! People who are driven and smart don't suddenly earn their first $5m go off and buy an annuity. They're more likely to go off and found their own trading shop at 30 than they are to retire.

Secondly, you know what happens to people who don't get hired after their internship at Jane Street? They go to HRT, to G Research, to Jump, to Citadel, to Optiver, to IMC, to XTX, if they're really unsuccessful they'll go to Google, Microsoft, Amazon, Meta. These are not people desperate for a job.

Re: Understanding Jane Street

#138

Post by cycomanic »

benreesman wrote: post #96
spoonjim wrote: post #87

Earlier quoted context omitted.

If you're going to hold AAPL longer than a quarter, then the tick vs. 1/8 doesn't matter, and if you're not, your trade doesn't need to happen to support the core goal of financial markets which is to finance companies.

You're the best kind of correct, which is technically correct. But what I said is that "multiplied by every retirement account we're talking real money". Which is no-qualifiers correct. That ETF that you should have your roll in? It's buying and selling securities all the time, and encountering friction along the way. And whether people have ETFs or individual equities in their (hopefully tax-advantaged) retirement a…

> But in general advanced actors are slicing strips of meat off of each other to the benefit of 401ks everywhere.

I am not sure I understand. That would mean that the number of advanced actors would stay stable or go down over time (generally much research shows that markets tend to concentrate even in pure random trading, so the number of advanced actors should go down). Is that actually the case?

Re: Understanding Jane Street

#139

Post by stackbutterflow »

spoonjim wrote: post #81
j7ake wrote: post #77

Regarding the last point in working at Jane Street versus research on fusion/cancer: You could maximise more good by first working at Jane Street in your 20s, retire by 30, and then set up your own smal fusion/cancer research lab where you can do research without being tied to government funding and politics. By 30, many cancer researchers have barely finished their PhDs, so you won’t actually be that far behind scie…

I would suspect that almost zero people do this because working in an environment changes who you are as a person. If you spend a lot of time around cancer researchers you will think that cancer research is the most important thing in the world. You would need almost monastic mental compartmentalization to work at Jane Street for N years and remain singlemindedly focused on cancer research.

I thought about that often. Why are highly intelligent, passionate young activists not working into the industries they despise to change the system from within. But you're right that the system you're in changes you, corrupts you. You'd have to sacrifice a lot to climb the corporate ladder, doing things you despise, just for the chance to blow things up years, decades later. Your idealists friends would distance themselves from you. You'd have to constantly remind yourself that you're doing wrong things but that it's ok, because it is part of a bigger plan. It would be very isolating. You'd probably sacrifice your sanity for a foolish plan.

Re: Understanding Jane Street

#140

Post by harha »

data_maan wrote: post #110
ChadNauseam wrote: post #103

Earlier quoted context omitted.

What good has cancer research done to a person living in Madagascar?

So you've established: People in Madagascar don't get cancer.

Nope, just no treatment (not fact checked of course, but it sounds likely that they wouldn't get top notch treatment that an average person say in Western Europe could expect)
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