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What the interns have wrought, 2021 edition

blog.janestreet.com

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Re: What the interns have wrought, 2021 edition

#51

Post by whatshisface »

jollybean wrote: post #46
Jorge1o1 wrote: post #25

Earlier quoted context omitted.

You hit on so many great points in this post. Another important function trading firms (especially market makers like Jane Street) is to serve as ready-and-willing counterparties for the pension funds, endowments, and retirement funds of the world. All of those firefighters, police officers, and teachers can't get their monthly check unless the pension funds converts part of their investment into cash, and the amount…

Just because financial firms provide legitimately important services, doesn't mean the value they capture is commensurate with that value creation. So yes, it's a leap of abstraction for most people to grasp that 'market making' etc. is an important function, and that there's legit value created. ... but the amount of surplus capture is gigantic and that's the problem. Fouquet became Louis IX 'CFO' and somehow at the…

If you count the trading firms that don't do so well, are the people in finance really making off with all that much money, or is it the best firms taking all the sunlight from the middle and worst firms?

Re: What the interns have wrought, 2021 edition

#53

Post by exdsq »

saagarjha wrote: post #8
travelbuffoon wrote: post #6

Earlier quoted context omitted.

14.5k is almost the monthly base pay for a senior software engineer at a FANG in Bay Area/NY/Seattle/ZRH (not counting bonus and stock though - which make a significant difference). So it does seem very high, but not impossible?

No way, I get more than that at an entry position outside of FANG. Senior software engineer pay starts at $25k/month and goes up from there. Edit: I just noticed base pay–then yes, that's about what it'd be, but base pay tends to cap out very quickly so it's not a good measure of compensation.

I moved to the bay area at the same time as taking a senior engineering role for an Eastern European startup on $100k - feel like I missed a trick lol :P

To be fair I don't care about salaries as much as half of HN appear to, I'm quite comfortable on that with a wife on a postdocs wage too.

Re: What the interns have wrought, 2021 edition

#54

Post by jdavis703 »

eulgro wrote: post #13

Whenever I hear about Jane Street and other such trading companies I wonder what do they bring of value into the world. It seems they're basically just working on increasing economic equalities.

In a capitalist economy everyone is working on increasing economic inequality. It seems for simplicity sake the question of what sorts of industry generate value should be separated from a question of whether corporations should be contributing to inequality.

Re: What the interns have wrought, 2021 edition

#55

Post by jdavis703 »

jon-wood wrote: post #4
WJW wrote: post #3

Earlier quoted context omitted.

> Like most companies, Jane Street also doesn't discuss pay. However, as we reported last year, pay for U.S. trading interns at Jane Street in 2020 was $14.5k a month, plus an extra $500 a week work from home stipend (making $16.5k as a monthly total) for. From https://www.efinancialcareers.com/news/finance/jane-street-p...

They’re paying their interns how much ? Either finance pays way more than I thought, or that’s wildly off - for comparison as the most senior developer in our London based organisation, having been here since the beginning, I make about $11k a month.

I’m far from the most senior developer at my company and I make far more than that here in the U.S. To the point I would be insulted if I got a job offer for $11k a month. The thing is, salaries for engineering talent is just really low in London.

Re: What the interns have wrought, 2021 edition

#56

Post by fighterpilot »

eulgro wrote: post #13

Whenever I hear about Jane Street and other such trading companies I wonder what do they bring of value into the world. It seems they're basically just working on increasing economic equalities.

Look at how much trading costs have reduced for all investors over the last two decades due to reduce spreads due to automated market making.

Re: What the interns have wrought, 2021 edition

#57

Post by code_biologist »

Kranar wrote: post #20
eulgro wrote: post #13

Whenever I hear about Jane Street and other such trading companies I wonder what do they bring of value into the world. It seems they're basically just working on increasing economic equalities.

Are you interested in a genuine discussion on this topic or have you already made up your mind? For those genuinely interested, for the most part trading firms employing quantitative and automated strategies look to keep the price of derivative or correlated assets in line with their underlying securities. For example a stock ABC might either directly or indirectly represent two other underlying stocks FOO1 and FOO2…

Look into info about Jane Street and other HTF firms' manipulation of OTC stock prices via dark pools, as well as abuse of the authorized participant status to use the ETF mechanism to naked short sell (not just index arbitrage). The liquidity that's being provided is at the expense of real price discovery and is being used to con retail investors.

If you search for "David Lauer interview", he's a former Citadel HFT that has spoken out about how the funds operating right now are a world away from the platonic ideal of market making you speak to.

Re: What the interns have wrought, 2021 edition

#58

Post by Nursie »

jollybean wrote: post #46
Jorge1o1 wrote: post #25

Earlier quoted context omitted.

You hit on so many great points in this post. Another important function trading firms (especially market makers like Jane Street) is to serve as ready-and-willing counterparties for the pension funds, endowments, and retirement funds of the world. All of those firefighters, police officers, and teachers can't get their monthly check unless the pension funds converts part of their investment into cash, and the amount…

Just because financial firms provide legitimately important services, doesn't mean the value they capture is commensurate with that value creation. So yes, it's a leap of abstraction for most people to grasp that 'market making' etc. is an important function, and that there's legit value created. ... but the amount of surplus capture is gigantic and that's the problem. Fouquet became Louis IX 'CFO' and somehow at the…

> It's always the people closest to the piles of Gold that end up with all of the Gold.

Honestly it's a lesson I've taken in my career so far - those who are closest to the money flows get to siphon off the most for themselves. I'm by no means that close, but it certainly informs what I put myself forward for.

Does the difference in skill, effort and output justify it? No, and many of the people working close to the money are no better (or are often far worse) than people further away, being paid less. But people are willing to pay them more, because they are also close to the larger flows of money.

Re: What the interns have wrought, 2021 edition

#59

Post by Nursie »

jon-wood wrote: post #4
WJW wrote: post #3

Earlier quoted context omitted.

> Like most companies, Jane Street also doesn't discuss pay. However, as we reported last year, pay for U.S. trading interns at Jane Street in 2020 was $14.5k a month, plus an extra $500 a week work from home stipend (making $16.5k as a monthly total) for. From https://www.efinancialcareers.com/news/finance/jane-street-p...

They’re paying their interns how much ? Either finance pays way more than I thought, or that’s wildly off - for comparison as the most senior developer in our London based organisation, having been here since the beginning, I make about $11k a month.

> the most senior developer in our London based organisation, having been here since the beginning, I make about $11k a month.

Pre or post tax?

As a London fintech contractor (until recently) I have able to pull in around $22k USD pcm pre tax, or very, very roughly $14k USD pcm post tax - contractors have various ways to manage tax load and time off so it's never a direct translation.

$16.5k pcm for an intern still seems utterly crazy, given my starting annual salary of £21k 20 years ago, but if there is a) a ton of money flowing through the company and b) the intern is able to help them bring in more than that over the course of a year then... I guess it's worth it to them, and that's all that really matters.

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