Understanding Jane Street • Hacker News Board

Re: Understanding Jane Street

#231

Post by FabHK » Tue, Aug 02, 2022, 1:08 PM UTC

JackFr wrote: post #212

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…

Michael Lewis is a great writer, but the closer you are to the subject the more his shortcomings are exposed. I felt the same way about The Big Short and to some extent Liar’s Poker. He has an annoying tendency to assume that if he doesn’t understand something, either it’s completely inscrutable to everyone or simply BS. (And to pile on, The Blind Side was the touching story of how Lewis’s prep school classmate, an O…

While I agree that Flash Boys was below par, what's wrong with The Big Short? I thought that was well done, accessible, and largely accurate.

Re: Understanding Jane Street

#232

Post by Bluecobra » Tue, Aug 02, 2022, 1:09 PM UTC

ivanech wrote: post #113

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…

+1 to Trading at the Speed of Light. A great read, particularly for any engineer curious about clinging to the limits of physics. An example: microwave towers are used to beam data from Chicago to New York because it's faster than fiber optic cables. Even crazier: these microwave towers have their repeater hardware at the top of the tower (microwave towers usually have it at the bottom) so that they don't lose time i…

Even microwave is slow, they are using shortwave radio for certain signals. Maybe neutrinos are next?

https://sniperinmahwah.wordpress.com/2018/05/07/shortwave-tr...

Re: Understanding Jane Street

#233

Post by kenned3 » Tue, Aug 02, 2022, 1:13 PM UTC

hahnchen wrote: post #36

Sooooo hard to get hired here. I’m convinced it’s impossible without a referral or something

As I posted above.. I have family who work there. They were not a "referral or something".

I also worked at a hedge fund myself, and i was not a "referral" either.

They post positions online, apply. if you have the skills they are looking for you can get in.

Re: Understanding Jane Street

#234

Post by thw09j9m » Tue, Aug 02, 2022, 1:18 PM UTC

adave wrote: post #152

This reads like a very rosy picture of what these firms actually do. Surely they are secretive and tight lipped about all the money being made in low risk trades. There are known loopholes that market makers get to exploit since they help keep the casino going. No need to make its a noble profession or compare to impact to actual economy or mankind. These are the worst of the worst when its comes to exploitative and…

> There are known loopholes that market makers get to exploit since they help keep the casino going.

Like what? I work at an HFT and I'd love to deliver a new strategy to my manager.

Re: Understanding Jane Street

#235

Post by pedrocr » Tue, Aug 02, 2022, 1:20 PM UTC

There's one thing that always baffles me about this kind of market work. Let's for the sake of argument assume that HFT and other sophisticated market making activities are crucial for price discovery and other great social benefits. Then why does this amazingly important social good get mostly turned off over 80% of the time[1]? Even as a retail buy-and-hold investor in boring ETFs not being able to trade outside normal office hours is an inconvenience. Surely the world economy has even more uses for trading at all hours than me?

[1] https://www.nyse.com/markets/hours-calendars

Re: Understanding Jane Street

#236

Post by dagw » Tue, Aug 02, 2022, 1:21 PM UTC

hahnchen wrote: post #36

Sooooo hard to get hired here. I’m convinced it’s impossible without a referral or something

I know a couple of people working at hedge funds. Both on them just applied to a job posting and got hired without knowing anyone.

Re: Understanding Jane Street

#237

Post by altdataseller » Tue, Aug 02, 2022, 1:23 PM UTC

mkl95 wrote: post #159

SilverBirch wrote: post #137

>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 retire…

> 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. This kind of debate needs to be backed up by numbers or it won't be very productive. To get started we should know the percentage…

What would you do with $5m?

Re: Understanding Jane Street

#238

Post by bko » Tue, Aug 02, 2022, 1:28 PM UTC

paulpauper wrote: post #76

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…

I hope the author(s) do Medallion next. Medallion has probably gotten more scrutiny than any other fund, yet 3 decades later it's still as opaque as ever beyond vague 'statistical methods'. It makes a lot of money no matter what. It's more tight-lipped and exclusive than Jane Street. I don't even think anyone knows even if it's doing market making or not. Or if it's making short-term directional bets. You would think…

I would recommend the book The Man Who Solved the Market about Medallion founder Jim Simons. It doesn't go over the strategy extensively but goes through the history and culture of the firm. From reading it I would attribute their performance to execution. They have an incredible pipeline and hire almost entirely engineers and scientists. They have a rigorous scientific method in finding and executing on signals. And they've resisted taking more money and earning more on the management fee, opting for performance.

Everything about them is boring. They're well paid sure, but they're based in long island and hire mostly grey beards and don't overhire. Compare that to Jane Street hiring interns jumping through silly hoops like betting poker chips on puzzles. It's a bit of a farce.

Theoretically other firms could copy this, but the main goal of a hedge fund manager is keeping AUM. High AUM and poor performance is better than low AUM and strong performance. So its a lot easier to optimize on maximizing AUM and managing your brand. There aren't a lot of mathematicians that start hedge funds so the people starting them already seed the company with the wrong culture to replicate RenTech.

Re: Understanding Jane Street

#239

Post by nickparker » Tue, Aug 02, 2022, 1:32 PM UTC

fiprofessor wrote: post #207

bitcharmer wrote: post #199

Earlier quoted context omitted.

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.

That makes sense to me. But, in light of that, the ones who do go to Jane Street are relatively more likely to be interested in their tech stack and OCaml, as opposed to wanting to "test themselves" in the "adversarial setting" that the post I quoted describes. In contrast, the couple of people I know who went to HRT or Jump Street are much more like that description. They deliberately targeted HFT work, whereas Jane…

Jane Street recruits silly hard from Cornell’s CS dept because part of our required curriculum is functional programming w OCaml. They definitely introduce a lot of math/cs kids to the idea that finance can be a meaningful technical challenge instead of just Dyson bros in spreadsheets.

Then again I think one of the founders or top execs is an alum, so it’s possible Cornell has that course in that language because of Jane Street

Re: Understanding Jane Street

#240

Post by c-fe » Tue, Aug 02, 2022, 1:33 PM UTC

pedrocr wrote: post #235

There's one thing that always baffles me about this kind of market work. Let's for the sake of argument assume that HFT and other sophisticated market making activities are crucial for price discovery and other great social benefits. Then why does this amazingly important social good get mostly turned off over 80% of the time[1]? Even as a retail buy-and-hold investor in boring ETFs not being able to trade outside no…

Without arguing in favor or against the usefulness of HFT, the reason trading hours are limited is to increase liquidity during the specific hours that trading takes place. Liquidity is important for various reasons, in particular it helps reduce spread and thus there are better prices. Trading during other hours is possible, either during pre-market or after-hours, and there are even exchanges that enable trading on weekends, for example https://www.ls-tc.de/de/faq . During weekend trading, the spread is significantly higher.