4 ms·
It's not about losing other people's money only. What I'm worried about is: are extremely over-leveraged and able to get the returns they have by doing tax and
by typon 4y ago
It's not about losing other people's money only. What I'm worried about is: are extremely over-leveraged and able to get the returns they have by doing tax and regulatory dodges that their competitors aren't participating in? Did SBF learn how to operate in the financial world from seeing how Jane Street operates?
- whimsicalism 4y agoThey are a high frequency market maker. They are not a hedge fund. They make money from the pennies in the spread, many many many times over. They are not making over-leveraged big bets. I encourage you to talk to anyone who works in market-making finance.
- ralph84 4y agoBeing a market maker doesn't exempt a firm from blowing itself up. See Knight Capital.
- whimsicalism 4y agoKnight Capital was traded (so taking other people's money). Let's also try not to conflate "blowing up" with actual fraud. Traders are free to lose all of their own money, and doing so is not fraud
- ralph84 4y agoKnight was the largest market maker on NASDAQ and NYSE at the time they blew up so if you're going to use "they're just a market maker" as a defense for JS you can't dismiss Knight as "oh, not THAT kind of market maker." And Knight was known for plenty of shady activity like front running and spoofing.
- whimsicalism 4y agoKnight did not blow up due to fraud, so they were not "below board." Losing money is not against the law. Furthermore, Jane St only trades their own capital - ie. not capital deposited by customers in an exchange and not capital provided by selling ownership stakes of itself on a public market. This is a clear distinction from Knight. It's as if some guy just had a bunch of money, traded it and made some more money, hired a bunch of people to keep trading it, and it has made a ton of great returns and people are asking: is this a scam? Who would it be scamming? The only suckers are this guy.