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Jane Street suffers $15B hit after meltdown at Situational Awareness

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Re: Jane Street suffers $15B hit after meltdown at Situational Awareness

#81

Post by phil21 »

SanDiegoSun wrote: post #69
loeg wrote: post #60

Earlier quoted context omitted.

> Are they "trading" or "high-frequency-ripping-off-retail-investors"? HFT doesn't cost retail investors anything.

HFT raises pricing for retail traders by allowing front running of trades and makes the market less competitive overall for those without the infrastructure to do so. This isn’t even in question.

It's very much in question. As much as I hate to admit that since I do not like the concept of HFT existing as it's not providing very much value to society (imo) compared to the money made. The intellectual power behind this stuff would be much better put to use for something productive.

It likely lowers the transaction costs due to adding liquidity and narrowing bid/ask spreads for small retail orders.

But indirectly it likely raises costs for institutional investors like pension funds and large ETF managers making giant block trades on behalf their beneficiaries.

So tldr; Probably fractionally better pricing for your $5k GOOG trade, fractionally worse for your VOO holdings over the long term.

Re: Jane Street suffers $15B hit after meltdown at Situational Awareness

#82

Post by bmitc »

fancyfredbot wrote: post #51
bmitc wrote: post #40

Earlier quoted context omitted.

I don't think they even have a Chicago office, so it's good you didn't relocate there. They're based in New York. https://www.janestreet.com/culture/our-offices/

Elsewhere on their website: "Jane Street has offices in some of the world’s most dynamic cities, including a presence in Amsterdam, Chicago , Hong Kong, London, New York and Singapore." https://www.janestreet.com/culture/benefits/?office=nyc&view... (scroll down)

They list no jobs there.

Re: Jane Street suffers $15B hit after meltdown at Situational Awareness

#83

Post by loeg »

SanDiegoSun wrote: post #69
loeg wrote: post #60

Earlier quoted context omitted.

> Are they "trading" or "high-frequency-ripping-off-retail-investors"? HFT doesn't cost retail investors anything.

HFT raises pricing for retail traders by allowing front running of trades and makes the market less competitive overall for those without the infrastructure to do so. This isn’t even in question.

No, it doesn't. HFT lowers spreads for retail at the cost of slower market makers -- hedge funds. HFT isn't front-running (which is illegal).

Re: Jane Street suffers $15B hit after meltdown at Situational Awareness

#85

Post by lokar »

phil21 wrote: post #81
SanDiegoSun wrote: post #69

Earlier quoted context omitted.

HFT raises pricing for retail traders by allowing front running of trades and makes the market less competitive overall for those without the infrastructure to do so. This isn’t even in question.

It's very much in question. As much as I hate to admit that since I do not like the concept of HFT existing as it's not providing very much value to society (imo) compared to the money made. The intellectual power behind this stuff would be much better put to use for something productive. It likely lowers the transaction costs due to adding liquidity and narrowing bid/ask spreads for small retail orders. But indirect…

Does it really hurt institutional traders? How? Is it based on the idea that they can’t get the retail spreads? Because there is no world where they would have ever gotten them. A market maker would loose money doing that.

Re: Jane Street suffers $15B hit after meltdown at Situational Awareness

#86

Post by totetsu »

dmix wrote: post #16
totetsu wrote: post #7

Earlier quoted context omitted.

https://youtu.be/rE75WvOtcu8 This video from Patrick boyle has a lot of detail.

Always been a bit wary of Patrick. He reminds me of those people who in the 1990s/2000s would have become professional talking head guests on CNN. The older ex-academic/ex-industry guys who knew how to spin popular news stories into sound bites for the general public, while offering a veneer of authority. I'd rather get analysis from people who don't chase pop news stories for a living.

It’s good to be weary of any YouTuber. I don’t think he’s a sensationalist. it’s not like he’s saying “don’t listen to those other people, I’ll bring you the -real- info”. And he’s sighting journalists and experts and providing references. When he introduces a framing concept it’s usually from a published book. When other commentators were telling me that big tech was hiding their debts to make their balance sheet look better, he offered a more he offered the more neutral perspective that it’s normal to count purchase agreements that way. But that spreading disclosure of information across so many places so that only the careful notice, leads to partial revelations, where being right doesn’t matter. Which seems a more useful take away than just big tech is being fraudulent about the ai bubble.

Re: Jane Street suffers $15B hit after meltdown at Situational Awareness

#87

Post by Retric »

loeg wrote: post #60
bflesch wrote: post #56

Earlier quoted context omitted.

Are they "trading" or "high-frequency-ripping-off-retail-investors"? It's easy to make paper billions with synthetic shares and infinite deadline extensions for settlement. I'm old and still remember when Ken Griffin was lauded a clever person before he got caught with his hands in the GME mayo jar..

> Are they "trading" or "high-frequency-ripping-off-retail-investors"? HFT doesn't cost retail investors anything.

Market makers are simply an artifact due to how shares are traded based on limitations that existed before computers. The aren’t some inherent aspect of having a stock market.

The money isn’t coming from thin air. If N people trade a a finite set of shares back and forth every day the only way to extract money from that set of people is for them to lose money.

Re: Jane Street suffers $15B hit after meltdown at Situational Awareness

#88

Post by otterley »

0xbadcafebee wrote: post #67
otterley wrote: post #57

Earlier quoted context omitted.

“Be kind. Don’t be snarky.” is literally the first guideline in the “on comments” section.

There is a significant difference between sarcasm meant to insult, and sarcasm meant to be playful humor with a point. Common uses of sarcasm include witty or playful language, humorous banter, the expression of frustration at unfortunate events, self-deprecation, and as a coping mechanism for difficult situations. I see that you couldn't tell the difference in that situation, but trust me, that person was not insult…

The language is clear and unambiguous, and is intended to set a floor for the caliber and quality of discussion here.

I take your point, but the humor, if it was that, was made clumsily and was not well received. It’s not just me who felt that way; it was downvoted and eventually killed.

Re: Jane Street suffers $15B hit after meltdown at Situational Awareness

#89

Post by otterley »

margalabargala wrote: post #75
otterley wrote: post #62

Earlier quoted context omitted.

“Be kind. Don’t be snarky.” is literally the first guideline in the “on comments” section.

Right, and plenty of comments containing non-zero snark are fine. There's a line over which comments become unreasonable. If mine was over that line, so are a good 30% of HN comments. Seeing as those comments exist, I think your comment flagging criteria are what need to be adjusted here. Frankly I think you're just annoyed because the reaction to your comment was not "oh wow this guy could work for Jane Street if he…

The language is clear and unambiguous, and is intended to set a floor for the caliber and quality of discussion here. If 30% of comments here are equally bad, that means it’s not enforced as well as it could be. It doesn’t mean we’re intentionally lowering the standards.

My intent when I made that statement was not how you interpreted it. Its people genuinely impress me. And besides, what if I could work for them? Wouldn’t you be happy for me? Why the sour grapes?

As the Guidelines also state (paraphrasing): use the most charitable interpretation of a fellow member’s contributions.

Re: Jane Street suffers $15B hit after meltdown at Situational Awareness

#90

Post by phil21 »

lokar wrote: post #85
phil21 wrote: post #81

Earlier quoted context omitted.

It's very much in question. As much as I hate to admit that since I do not like the concept of HFT existing as it's not providing very much value to society (imo) compared to the money made. The intellectual power behind this stuff would be much better put to use for something productive. It likely lowers the transaction costs due to adding liquidity and narrowing bid/ask spreads for small retail orders. But indirect…

Does it really hurt institutional traders? How? Is it based on the idea that they can’t get the retail spreads? Because there is no world where they would have ever gotten them. A market maker would loose money doing that.

I'm certainly no expert whatsoever. This is just my understanding from talking with a few folks I consider quite smart who work in the space. Some working for HFT firms, some elsewhere. Also reading on the topic over the years.

There does seem to at least be some evidence that HFT firms decrease retail spreads overall. Either way, my main point being made is that negative impact to retail traders is very much in question.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2183806

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