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Takeaways from the Jane Street bond prospectus

ft.com

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Re: Takeaways from the Jane Street bond prospectus

#251

Post by mywittyname »

peeters wrote: post #163
justin66 wrote: post #51

Earlier quoted context omitted.

Who knew? But that article indicates America has used the short scale (base ten) forever and the UK has used it since 1974, so let's just assume that FT (an English language paper) is not worried about confusion regarding the meaning of 'billion' and there's a different norm at work here.

> the UK has used it since 1974, so let's just assume that FT (an English language paper) is not worried about confusion Anyone aged around 60 or older would have been learning these numbers before 1974, and that's a significant overlap with FT's audience. You are dismissing this as if it's Middle English. It's an entirely reasonable explanation, at least one that shouldn't be dismissed.

And there was a transition period where younger people need to know that the term could be ambiguous. It's not like they burned all the maths texts in 1974 and replaced them with newer literature. Older text books were probably in use into the 80s and perhaps the 90s.

From the writing of the era, it's clear this new definition for million was not popular, and many chose to continue using the "British meaning." So it was probably in colloquial use for quite a while, and the transitional term "1 thousand million" became the proper style.

Re: Takeaways from the Jane Street bond prospectus

#252

Post by wyager »

tikhonj wrote: post #207
andrew_eu wrote: post #86

I often discuss Jane Street as a great model of employee branding. They do well placed adverts/sponsorships (e.g. Standup Maths[0]), they produce a quite decent quality podcast (Signals and Threads [1]), and they have consistent monthly puzzles [2]. That level of investment in branding only makes sense, I think, at a large size. I'm kind of surprised they only have ~2500 people. [0] https://www.youtube.com/user/stand…

Jane Street has been doing this since they were much smaller. I interned there when they had like 300 people, and they were actively cultivating a great brand as an employer back then too—and looks like they've really made it work over the last decade! My impression with them in general was that they were willing to do lots of things that did not "conventionally" make sense at their size, and those things paid off. T…

I used to work there - the jane street code review software is awesome, kind of like graphite but it works reliably. You can write a big tree of PRs. PRs get reviewed separately and you can merge them in any order at your leisure, without worrying too much about rebase issues or clobbering review or whatever. I would love to have some open source thing like that that actually works nearly as well. It may exist, but I haven't seen it yet.

And yeah, jane street is a pretty compelling demo that A) NIH syndrome is fine if you're good at writing software and B) it doesn't really matter that much if you use a mature language or some uncommon immature language

Re: Takeaways from the Jane Street bond prospectus

#253

Post by wyager »

peppertree wrote: post #218
tikhonj wrote: post #207

Earlier quoted context omitted.

Jane Street has been doing this since they were much smaller. I interned there when they had like 300 people, and they were actively cultivating a great brand as an employer back then too—and looks like they've really made it work over the last decade! My impression with them in general was that they were willing to do lots of things that did not "conventionally" make sense at their size, and those things paid off. T…

I often dread when I see an employer using in-house systems for common tasks like project tracking and code review. I'm curious how does JS's internal tools stack up against systems out there, like Github or Jira.

I prefer the JS thing to github, mostly because it makes it a lot easier to juggle lots of in-flight changes that depend on each other while simultaneously supporting code review.

Re: Takeaways from the Jane Street bond prospectus

#254

Post by alchemist1e9 »

EMM_386 wrote: post #200

> Jane Street is stupidly profitable — net trading revenues of $4.4bn in the first quarter, after a $10.5bn haul in 2023, and a profit margin north of 70 per cent — but it bears repeating. That is the fourth straight year of net trading revenues exceeding $10bn. Gross revenues came at a record $21.9bn in 2023, up 34 per cent from 2022. Yes, I suppose this is all something to get all starry-eyed over, Jane Street encr…

> I see it another way. I see people's hard earned money being siphoned by enormous financially-engineered vacuums, never to be seen again. And not just in the US, globally. This won't stop at 30% of the US equity market. It won't stop until the music stops and the last chair breaks. Which may or may not be soon. It will certainly be coming at some point.

Envious bullshit! The reason they are so profitable is that believe it or not they are replacing earlier operators who were less efficient and taking more transactions costs out of the system before. To be anti-Jane Street is the same as being pro-Big Bank of the past, that was taking more money out of the economy doing a worse job!

Unless you know the history of global financial markets and lived it then you don’t understand. For example in the late 80s the CBOT treasury bond bit had over 1000 traders in that pit. They were all making money and quite a few a huge amount. And there was many more people supporting those traders of the floor. That was just a single futures bond contract! With Jane Street we have 2,631 employees doing the equivalent job globally and for less total cost of at least 80,000 employees in late 80s.

The profits per employee are higher obviously but that’s the effect of technology and productivity but the total price being charged to the economy as a whole is much lower. This trend will continue and I would not be surprised in 10 years that a company of 200 people will provide the entire function of those 2600 today, and probably the profits per employee will be $10M per person. But that’s what we want, is a good thing not bad, portraying otherwise is just Envy.

Re: Takeaways from the Jane Street bond prospectus

#255

Post by jallmann »

tikhonj wrote: post #207
andrew_eu wrote: post #86

I often discuss Jane Street as a great model of employee branding. They do well placed adverts/sponsorships (e.g. Standup Maths[0]), they produce a quite decent quality podcast (Signals and Threads [1]), and they have consistent monthly puzzles [2]. That level of investment in branding only makes sense, I think, at a large size. I'm kind of surprised they only have ~2500 people. [0] https://www.youtube.com/user/stand…

Jane Street has been doing this since they were much smaller. I interned there when they had like 300 people, and they were actively cultivating a great brand as an employer back then too—and looks like they've really made it work over the last decade! My impression with them in general was that they were willing to do lots of things that did not "conventionally" make sense at their size, and those things paid off. T…

> Most people would see this as wasteful NIH but I'm convinced it was a net benefit for them—they managed to be so productive in an absolute sense and especially on a per-engineer basis because they were willing to build so much themselves, not despite it.

It paid off for them, but I would say it's a risky move in general - it is very easy to get sidetracked with failed projects that have nothing to do with the business. There are many examples - Uber's internal chat system, etc.

Others tools were more a necessity, eg the OCaml build story was not great back then. Investing in OCaml itself was a calculated risk.

Also I wonder how things would be different if they were starting today, where there are more mature tools in the space.

Re: Takeaways from the Jane Street bond prospectus

#256

Post by nolongerthere »

bogtog wrote: post #75
Smaug123 wrote: post #13

> At the end of 2023, Jane Street employed 2631 people > About 80 per cent of the company's capital comes from employee equity, which has swelled to $21.3bn at the end of 2023 o.O

Are you telling me that one of American capitalism's peaks is basically a worker collective?

I know you’re kinda joking but, The problem with socialism isn’t the voluntary organizations that people can join or leave at will, it’s the forced involuntary labor that is always brought about. Capitalism is about voluntary mutually beneficial partnerships which this is.

Re: Takeaways from the Jane Street bond prospectus

#257

Post by zie »

pas wrote: post #223
zie wrote: post #213

Earlier quoted context omitted.

They provide market liquidity. The chances that a seller and buyer come together at the exact same time across the 7.5 hours of open market operations is fairly low, so they buy from sellers and sell to buyers and hold in between to keep the markets liquid. This liquidity costs(often advertised as the bid/ask spread). We could essentially close them down if we moved all trading to say 1 hour a day.

regular buyers/sellers can use limit orders, no? speculators can then sell/buy to/from them and if they are doing it well, they make a profit. (and help narrow the spread.) sure, great, they even inject some liquidity. but why do we want a narrow spread? it only helps people who don't know which side of the trade they would rather be on, no?

I agree with @cityofdelusion's comment.

You can absolutely set limit orders, but depending on the limit, other people may or may not be willing to trade with you. Your order can sit all day and never be accepted.

If I want to sell AAPL, and set the limit oder to $1/share, buyers would take that trade instantly. But if I set the limit order to $10k/share, nobody would buy from me.

The exact same thing happens with the buy side.

It's like haggling with the vendor on the street corner or negotiating with your car dealer.

Think of it like a liquidity tax. Jane Street and other market makers(Citadel, etc) compete over that liquidity tax. The more often a fund, ETF or stock is traded, the lower the liquidity tax.

If XYZ Corp is very illiquid and only trades a few shares a month, then Jane Street will charge you a lot of tax to allow you to trade it instantly, because they have a harder time knowing what they can get for it a month from now when someone actually wants the trade.

You can see the wide range of bid/ask spreads for ETF's here: https://www.etf.com/sections/news/etfs-highest-lowest-tradin...

Notice something like SPY(S&P 500 fund) is basically free to trade, but something like EEH costs you a very pretty penny to instantly trade. For EEH, you might be better off re-issuing limit orders and just hoping someone comes along that wants that fund. If you let Jane Street or other market makers handle the trade, they will charge you more than it's worth to trade.

Re: Takeaways from the Jane Street bond prospectus

#258

Post by alchemist1e9 »

zie wrote: post #212
EMM_386 wrote: post #200

> Jane Street is stupidly profitable — net trading revenues of $4.4bn in the first quarter, after a $10.5bn haul in 2023, and a profit margin north of 70 per cent — but it bears repeating. That is the fourth straight year of net trading revenues exceeding $10bn. Gross revenues came at a record $21.9bn in 2023, up 34 per cent from 2022. Yes, I suppose this is all something to get all starry-eyed over, Jane Street encr…

They provide market liquidity. The chances that a seller and buyer come together at the exact same time across the 7.5 hours of open market operations is fairly low, so they buy from sellers and sell to buyers and hold in between to keep the markets liquid. This liquidity costs(often advertised as the bid/ask spread). We could essentially close them down if we moved all trading to say 1 hour a day. Though most retail…

[flagged]

Re: Takeaways from the Jane Street bond prospectus

#259

Post by alchemist1e9 »

andrepd wrote: post #247
EMM_386 wrote: post #200

> Jane Street is stupidly profitable — net trading revenues of $4.4bn in the first quarter, after a $10.5bn haul in 2023, and a profit margin north of 70 per cent — but it bears repeating. That is the fourth straight year of net trading revenues exceeding $10bn. Gross revenues came at a record $21.9bn in 2023, up 34 per cent from 2022. Yes, I suppose this is all something to get all starry-eyed over, Jane Street encr…

I do agree with you. It's neither sustainable not really desirable, the amount of effort and resources and smart people dedicated to the financial sector.

Less smart people are employed by the financial sector than in the past and less will be in the future.

Re: Takeaways from the Jane Street bond prospectus

#260

Post by barneygale »

__oh_es wrote: post #141
paxys wrote: post #112

Earlier quoted context omitted.

Typically at such companies you have to be at the very top of the hierarchy to be able to buy in and get a slice of the profits. It is very unlikely that rank and file employees are able to participate, at least at a scale larger than, say, a Google employee buying some extra shares.

$100k buy in at the hedgefund I know. Its a big figure for most but starting salaries, friends & family, and personal loans will get you there. >20% return is quite easy to justify. You're also looking at a 50%-200% annual bonus, mostly leaning to the higher end of the range. Its a very different world!

> $100k buy in at the hedgefund I know. Its a big figure for most but starting salaries, friends & family, and personal loans will get you there.

Surely this is a HN culture bubble? Very few people can borrow tens of thousands of dollars from family and friends to lend to a hedge fund. Not only would I be refused, I'd damage friendships by exposing the moral vacuum at my core.

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