What the interns have wrought, 2025

All for-profit businesses can be viewed abstractly as “in the business of making money”, so this doesn’t really distinguish Jane Street in any way.

> … why/if what they do is useful to anyone?

The utility that Jane Street provides is to the be a persistent buyer and seller of equities. Basically you can call them at any time and buy shares or sell shares. Most shareholders do not trade very often so without a “market maker” like Jane Street it can be a lot of work finding a buyer/seller who is willing to trade on your schedule at the current market price. You’ll have to pay them extra to convince them to trade, which makes it harder to trade profitably. Jane Street significantly lowers the price and makes trading easier (“provides liquidity to the market”).

You may not like it but we function in a capitalist society and as such the efficiency of markets is part of that. To have that happen usually requires the market as a whole participating and that includes firms like Jane Street. In the India case I don’t know if what they were doing was illegal or not, India is complicated and the laws there in my opinion are influenced not as much by standards but how well you scratch the itch of others. It is clear the option markets in India was/is highly inefficient in that Jane Street was able to pull the rug over and over. I would be curious who the counter parties were and if this is more about pride of Indian financial institutions not being competent instead of this being illegal. Thinking more about Hindenburg and how India reacted. In the US it feels like a gray area because at the end of the day the options market was clearly clueless on how they should be pricing the options.

Speaking from a US perspective people get thorny on these topics but I think it’s great that folks are always pushing the boundaries. This type of law is tested and we figure out what is ok and what is not. It’s often not cut and dry. Maybe Jane Street was entirely in the wrong in India and they will pay a price. Maybe not. Hopefully their markets learn and benefit from it.

I don’t believe any of us are in a position to say how folks should be spending their time. If we went down that road we could probably argue it back to nobody should be working and should simply be farming for our own food.

In turn that leads to more efficient markets since prices converge to their "correct" value faster.

Companies like JaneStreet, 2Sigma, etc employ some of the best software engineers, mathematicians, physicists and what not just so they can

    - have better weather forecasts to identify whether a 1 degree delta in South CA can increase oil costs cents on the barrel,   
    - run pandemic simulations to identify how the spread might happen and where inflation will rise so they move faster,   
    - track occupancy rates for pharmacies, hotels, casinos, etc via satellite imaging to identify spikes in usage,
    - track the tiniest of things like butterfly populations to identify increase in earnings for certain brands of hotels,   
    - build some of the most efficient software and write their own compilers

Finance is not alone either. A non-trivial amount of big tech is on tracking users and serving ads better.

Do I blame the engineers? No.

I am just lamenting the state of society since this is how we have the brightest among us function and work.