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They're proprietary traders (that is, they trade with their own money and don't have clients - unlike a hedge fund), so they're very unlikely to tell the world
by elemeno 11y ago
They're proprietary traders (that is, they trade with their own money and don't have clients - unlike a hedge fund), so they're very unlikely to tell the world what their performance looks like. If it's bad, they'd not want you to know, if it's good they'd not want their competitors to know!
- tosseraccount 11y agoIt looks like they are a high frequency trading outfit. It would be interesting to know how these private black box firms actually performed compared with the returns on a transparent security like the Vanguard S&P 500 fund.
- tikhonj 11y agoThey're not really a high-frequency firm by most definitions. They use some high-level strategies that high-frequency firms also use (ie market making) and have some automation, but don't optimize for latency. Nothing about that is high-frequency trading per se—in many securities, you can make markets manually or semi-manually. Market making as a strategy is more like providing a service on the markets than it is like investing. You don't make money by holding a security until the price moves; indeed, you try to limit you exposure to the security as much as possible. Instead, you maintain offers to both buy and sell a security at any given time and make money on the differences between them (the "spread"). The main value you provide is liquidity, making it easier for other people to buy and sell the security quickly, rather than price discovery or the like. While Jane Street does a lot of different things, they're mostly known for market making on ETFs. This makes them more a normal company that happens to operate on public markets than a fund of some sort.
- Retric 11y agoDepends, you can make more money as a market maker by expanding the spread than collapsing it. Though this is obviously a risky move.
- auntienomen 11y agoHow is your comment related to tikhonj's? It seems like a non-sequitur.
- Retric 11y agoMarket making as a strategy is more like providing a service on the markets than it is like investing. I was pointing out that 'Market Making' is not always a good thing. In the broadest ters it increases costs for some trades, and decrease costs for others. So, it's not always good for the market.
- dllthomas 11y agoThis doesn't make sense to me. Say I'm a market maker. How do I make the spread bigger than it would have been if I was absent? I suppose I can hit any orders anyone else places inside my larger spread, but that just gives anyone the opportunity to pump money out of my accounts...