> Jane Street has generated more than $40bn in net trading revenues in the year to Friday, even accounting for the July loss, which exceeds its entire haul for 2025, according to one of the people familiar with the matter.
This would make JS one of the most profitable trading firms of all time even with the loss.
Basically profit from trading before they pay for salaries and office rent and all that jazz.
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..
HFT doesn't cost retail investors anything.
i.e. retail investor → brokerage platform → clearing/execution infrastructure → Jane Street → payment back toward the brokerage side of the chain.
Who captures the economic value created by retail order flow?
Jane Street.
In an ideal market, this product line shouldn't exist. Institutional investors should not be making money on the activity of retail investors.
What incentives determine where that flow is sent, and would investors receive better execution if their orders were exposed to genuinely competitive price formation rather than privately internalised by a concentrated group of wholesalers?
The regulators should be squashing any HFT related or retail order flow, but it's so opaque _by design_ that getting policymakers, or the general public, to understand that retail investors are paying some portion of tax on their $20T USD annual trades to these companies.
Granted, these order flows _sometimes_ work the other way -- and retail users get a better deal on a trade.. But would you really expect the market to be worth what it is, if that was the case less more often than not?
There is a clear and obvious conflict: the broker is supposed to seek the best execution for the customer while potentially being paid by the firm receiving that customer’s order. How can that be, when the broker's in bed with the liquidity providers?
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.
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.
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.
HN guidelines do request use of original title and in this specific case the change of title is misleading by implying that situational awareness directly caused losses at JS.
In the text it says "the US trading firm was wrongfooted during last month’s market ructions including the meltdown at AI-focused hedge fund Situational Awareness" so while SA is mentioned the implications of a direct link to the losses is less strong.
edit: more detail in https://www.reuters.com/business/finance/jane-street-took-15... confirms some losses linked directly to SA and some losses to their own positions.
Correlation is not causation.
Pretty short so I imagine more details and analysis are forthcoming.
But he is very entertaining and has more than a veneer of authority. His early educational YouTube videos covering topics like derivatives pricing are genuinely very good.
Which is a common story these days. Nothing wrong with that, there are worse people who become the Youtube-content guy. I've just gone down that road enough times to know to eject early.
Speaking for myself only, but if I were going to post a comment like yours on a public forum insinuating doubts about a specific person and vaguely implying their analysis is not trustworthy, I'd come armed with at least once example.
For people with 1M+ followers, anything that could be said has already likely been said.
So you can blame him for that style lately, but its not all he can do.
On a more serious note, Jane Street has hired some very impressive technical talent. I'd work for them, myself, if I didn't have to relocate to Chicago.
They have $140B AUM.
So they are up ~18%.
https://observer.com/2024/11/jane-street-quantitative-tradin...
Obviously I'm not entitled to a job, so no hard feelings on that, but it's a little sad because I have always been a big functional programming nerd and it would be fun to work with Ocaml libraries. The fact that they pay really well is also appealing...
No, even better: they're still up $40B for the year.
"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)
I don't see anything in my comment that is more against HN guidelines, nor more uncalled for, than the humblebrag in the original comment.
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 wanted but he doesn't because he doesn't want to move cities. Wow so cool"
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.
Lots of companies manage to impress lots of incompetent, arrogant people. Your initial comment sounded like such a person and mothing you've said since has done anything to disabuse the reader of that. "The rules say you're not supposed to reply with sarcasm! Flagging your comment!" says the person that Jane Street would totally love to hire.
Like I said, you're just annoyed someone is criticizing your arrogance. If you weren't being arrogant, then my initial reply is utterly unobjectionable; it's only unkind or sarcastic in response to the arrogant interpretation of your initial comment, and is inert to the "best possible" interpretation by the rules you don't follow but want others to.
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.
In truth, the rules here are intentionally vague, so they can be used as a cudgel by people who don't like what they read. For the mods it's for behavioral control, and for the users it's for thought control. The mods want the website to be a financial tool for YC, and the users want all opinions to mirror their own. But HN is built awkwardly, and forces too many different kinds of users into one tiny space. So the mods do what they can to remove submissions and kill comments, to make the appearance of some kind of nerd chat gestalt. This thread is an example of that failed attempt at enforced harmony. You can't punish people into electing to behave the way you want, it just makes them angry.
Of course some people will get angry and defensive when they cross the lines and get called out on it. That’s just human nature. (YouTube is chock full of examples.)
It doesn’t mean enforcement isn’t necessary, though. The owners have made it clear that they don’t want this site to devolve into a free-for-all full of sniping and bile. Their house, their rules. Want to be a dick? There are other venues for that.
[1] https://www.ft.com/content/28a51284-98cc-4767-a306-0540d2656...
When Leopold went to pitch NY investors they all passed and thought he was full of it. He could only convince California tech guys. Savvy finance guys saw SA for what it was (leveraged beta trade). Jane street are finance guys, not California tech bros.
This is completely illogical. If they knew it was going to tank, they wouldn’t invest.
As conspiracy theories go, this one doesn’t even have a leg to stand on.
Personally I have mixed feelings about what they do. The engineer in me used to root for them. The way they operate as a pure tech shop was very refreshing in the hedge fund/traditional finance world (crypto world is the opposite). But the trader in me now abhors how they make their money, that is arguably at the expense of retail traders.
...
I'll see myself out.