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Understanding Jane Street

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Re: Understanding Jane Street

#191

Post by uniqueuid »

serioussecurity wrote: post #122
uniqueuid wrote: post #82

Earlier quoted context omitted.

That sounds as if you can jump into a field without spending 10-20 years of learning and do cutting-edge research. I'm not sure whether someone who has done quant finance can make meaningful contributions to the actual science. So if your role ends up spending money and doing top-level management, why not just fund companies that do and stay in finance? [edit] To add one prominent example - it's doable, as Jeff Hawki…

Hawkins is a notorious con artist with nothing to show for almost two decades of work.

I can't judge that from an outside perspective, but to be fair, having nothing to show for two decades of work is an intrinsic occupational risk of science.

Re: Understanding Jane Street

#192

Post by LeonidasXIV »

mgaunard wrote: post #134
Gene_Parmesan wrote: post #125

Earlier quoted context omitted.

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.

Writing `mli` files is pretty much idiomatic or at the very least, not unusual.

Re: Understanding Jane Street

#193

Post by twic »

hchz wrote: post #41
smabie wrote: post #25

Earlier quoted context omitted.

Flow from other HFT / market makers is often very toxic. They are playing the exact the game as you.

Right, sure, and that game is not lifting the market, generally speaking.

Other market makers are often moving away from something they've seen but you haven't yet. When whatever that is hits you, the fills you got from the other market maker will look really bad.

Re: Understanding Jane Street

#194

Post by tester756 »

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 30, many cancer researchers have barely finished their PhDs, so you won’t actually be that far behind scientifically, but you’ll be far ahead financially.

A lot of people trying to change their careers would like to have a talk with you about this, I bet.

Ph.D in CS is 5-10 years ahead of newbie trying to learn computers

Re: Understanding Jane Street

#195

Post by ocfnash »

zellix wrote: post #50
dcolkitt wrote: post #31

Earlier quoted context omitted.

Yes, they pay short term capital gains taxed as ordinary income for equities. For futures they pay a blended 60/40 long-term/short-term rate, since all the futures trading is taxed that way (including for retail)

Pretty much, except for Susquehanna. See https://www.propublica.org/article/jeff-yass-susquehanna-tik... for details.

Assuming it is accurate, the final sentence in this article is especially notable.

Re: Understanding Jane Street

#196

Post by red2awn »

nly wrote: post #129
mupuff1234 wrote: post #21

What tax do these type of companies pay? I'm gonna guess they aren't paying the "retail" short term capital gain tax.

They'll have their cost centers in places like NY and London incorporated separately, making consistent losses, and then the arm doing actual trading will be in Bermuda or somewhere with 0% business tax.

Under this structure, how are trading profits shifted to the cost centres to pay for operating expenses?

Re: Understanding Jane Street

#197

Post by adchari »

howling wrote: post #184

> The other mitigation strategy is: just buy some puts. I wonder who are the counterparties selling puts to Jane Street. My cynical view is that they are losing overall but the traders don't care because they are winning in short term (when nothing happens) and may have already changed their job when the market crashes.

They don’t really have to be losing in the long term, being short deep out-of-the-money puts nets you an option premium if the underlying never crashes, and once you delta-hedge that position, you can remove the tail risk from your portfolio

Re: Understanding Jane Street

#198

Post by murbard2 »

benreesman wrote: post #60

I find this stuff fascinating, and this article is way above average for online posts about proprietary/algorithmic/quantitative/low-latency trading (very leaky Venn diagram there). I have a few nitpicks but overall it's informative and it's an interesting format: viewing an industry through the lens of a particular firm, especially one as fascinating as Jane. Anything that develops literacy in modern finance amongst…

Having worked as a quant GS on HFT, +1 on Flash Boys being criminally stupid at best and bad faith at worst.

Re: Understanding Jane Street

#199

Post by bitcharmer »

fiprofessor wrote: post #188
benreesman wrote: post #153

Earlier quoted context omitted.

I think the author meant "could retire very comfortably in their 30s", and you're correct to point out that's not what it literally says. But as for "could"? Shit you can do that at Google, Microsoft, Amazon, Meta if you're in that league and start out of undergrad. In my experience (more than a few of my FAANG-era colleagues either came from or went to high-technology finance), people don't actually leave Google to…

> I think people go to high-technology finance because they want to test themselves against a harder class of problem in a more adversarial setting against people who feel the same. Maybe this is so at other finance firms, but my experience with developers who go to Jane Street is quite different. Because Jane Street heavily advertises OCaml as part of its recruiting strategy, I know many people who ended up there ju…

Having worked in HFT for well over a decade now, I'd say OCaml is more of a deterrent than helps in getting access to larger pool of talent.

Re: Understanding Jane Street

#200

Post by SonOfLilit »

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…

Downvoted because I feel this is nitpicking for nitpicking's sake, and it gets more things wrong than right.

> OCaml does type inference

This is an uncharitable interpretation of the author's intent.

> Investors are not market-makers This is a very uncharitable interpretation of the source:

"In one sense, every investor is a market maker and the only difference is their timeline. Jane Street is far along the continuum towards strict market-making: being willing to buy and sell assets at a price close to, but not exactly at, the market price."

> they actually have a lot of developers working on the compiler and on libraries for OCaml [..] in C or C++

Yes, and? The author still makes the correct point that they gambled hard on OCaml.

> Jane Street is hiring massively and not nearly as exclusive as advertised here

I bet they're hiring very selectively for the high value core jobs discussed, even if they have a large support staff that does things like writing OCaml infrastructure in C/C++ and gets paid much closer to non-hedge-fund rates.

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