1. Introduction and Overview
Overview: A prop trading firm that uses the niche OCaml language and does Market Making & Arbitrage.
Background: Jane Street was founded in 2000 by three traders from SIG (Tim Reynolds, Rob Granieri, Michael Jenkins) and IBM development engineer Marc Gerstein, initially trading options and American depositary receipts;
Business coverage: Jane Street was first known for ETFs trading. While consolidating its position as a leader in ETFs trading, Jane Street is also a major player in the stock, bond, option and cryptocurrency markets.
Business scope: Jane Street Group LLC is the parent company. Based on the client's jurisdiction and business needs, it has two business lines, traditional business and digital currency, and has established wholly-owned subsidiaries in the United States, the United Kingdom, Hong Kong, Japan, Cayman, BVI and other places (as shown below) to provide services.
2. Core Business and Crypto
Core Business
Jane Street traded over $10 trillion in securities in 2020, accounting for one-third of the trading volume of the entire US ETF market and nearly 10% of the trading volume of the US stock market. According to the financial data disclosed in the period, Jane Street's adjusted profit in the first six months of 2020 was $6.3 billion, an increase of more than 1,000% over the same period in 2019, and its net trading income in the first half of the year was $8.4 billion. This profit level is twice that of Citadel Securities in the same period.
Traditional Direction
a) Business in the United States Jane Street Capital, LLC: Proprietary trading + market making services for exchanges Jane Street Execution Services, LLC: Brokerage services for institutional clients and other third-party dealers
b) Business in Europe Jane Street Financial Limited and Jane Street Netherlands B.V., two entities regulated by the UK FCA and NAFM respectively, provide OTC business to European customers. Another company established in London, Jane Street Europe, provides proprietary trading and market making business;
c) Business in Hong Kong Jane Street Hong Kong Limited (CE No. BAL548), which holds Type 1 and Type 2 regulatory licenses from the Hong Kong Securities Regulatory Commission, provides securities and futures brokerage services to Hong Kong customers;
Digital currency direction
The digital currency business is provided by four companies established in the United States, the United Kingdom, Hong Kong and Japan (Jane Street Cryptocurrency Trading, LLC, Jane Street Cryptocurrency Trading Europe, LLC, Jane Street Cryptocurrency Trading Hong Kong Ltd, Jane Street Cryptocurrency Trading Japan GK), including proprietary trading, high-frequency market making, and investment services.
About Crypto
Jane Street began to enter the digital currency field in 2017, providing multi-currency market making services including BTC and ETH for Robinhood, CEX, and DEX;
In the same year, the founder of Alameda Research and FTX left Jane Street and, together with former Google engineer and MIT alumnus Gary Wang and high school classmate Nishad Singh, who had just graduated from Berkeley with a degree in computer science, raised funds to establish a cryptocurrency quantitative trading company, Alameda Research, starting his journey to becoming the king in the cryptocurrency field.
In 2018, Jane Street launched its own trading platform JCX for digital currency trading, providing 24/7 trading services for the most actively traded crypto tokens;
Crypto Investment
a) In December 2021, Jane Street participated in 1inch's $175 million Series B financing, marking its first investment in the primary track of Crypto;
b) From 2022 to date, Jane Street has completed 9 investments around the Defi mainline, including Bastion, a decentralized lending protocol in the NEAR ecosystem, Vertex Protocol, a decentralized foreign exchange trading platform in the Terra ecosystem, and Euler Finance, a decentralized lending platform in the ETH ecosystem;
c) In May 2022, Jane Street completed the first loan operation by a leading financial institution on Wall Street through the DeFi protocol through the decentralized lending platform Clearpool. The specific purpose of the loan was not disclosed, and it is not ruled out that it was used as capital for Defi project investment or market making on decentralized exchanges.
3. Technology Stack - Ocaml
Language: Unlike other traditional/Crypto Native market makers who choose C, C++, Rust or Java (the B2C2 front-end business technology stack is mainly Java and Rust), Jane Street chose the more niche programming language Ocaml[1] (an implementation of the caml language). Its trading system, monitoring system, and data management system are all developed using Ocaml. According to the Stack Overflow 2022 Developer Survey Report[2], JavaScript has been the most commonly used programming language for ten consecutive years with 65.36% of the votes, while Ocaml ranked 39th (3rd from the bottom) with 0.52% of the votes; [1] OCaml is a multi-paradigm language with relatively high development efficiency and operational efficiency. Apple's Swift language and Rust language are both influenced by the Ocaml language;
[2] For this report, StackOverflow surveyed developers in 180 countries and regions around the world. The data of respondents who spent less than three minutes in the survey was discarded.
Advantages and Disadvantages:
1) Filter: Jane Street draws on the "Python paradox" proposed by Paul Graham, the founder of Y Combinator: "If a company chooses to write its software in a comparatively esoteric language, they'll be able to hire better programmers, because they'll attract only those who cared enough to learn it." Only the elite among the elites will give up Java and Python to learn a niche and highly academic programming language like OCaml. This has also become a natural filter for selecting the best developers;
2) Retention rate: At first, since there were too few developers who knew or mastered Ocaml, Jane Street Chief Development Engineer Yaron Minsky promoted the Ocaml language by preaching at recruitment events, publishing articles, organizing lectures, and opening university courses. He also organized an Ocaml training camp within Jane Street to reduce the learning curve for new employees. Gradually, the challenge became an advantage that Jane Street was proud of. Since the Ocaml language was not applicable to other peer institutions, it successfully achieved employee retention needs while improving production efficiency;
4. Core Team
Founding Team
1) According to available information, Robert Granieri is the only founder still working for the company. The company has no CEO, no hierarchy, and no clear management committee. To quote the Financial Times, "It's secretive, it's different (the FT says it's a bit like an anarchist commune where job titles didn't count until recently), it's huge, and it's hugely profitable. It also pays unusually well."
2) Co-founder Tim Reynolds is passionate about art and charity. In 2010, he established ÀNI Private Resorts and the non-profit ÀNI Art Academies. So far, he has established resorts and art academies in four countries, namely Thailand, Sri Lanka, Anguilla and the Dominican Republic, to provide free art education for aspiring artists.
Core member:
1) The company’s official website does not disclose any information about the core team. Instead, it provides more information about the company’s business, corporate culture, technology research, and employee sharing, which is full of a young, energetic, positive working atmosphere and academic atmosphere;
2) The Minsky Child
V. Disclosure of Information
According to data disclosed by Companies House, Jane Street Europe's revenue is mainly composed of Principal Transaction. In 2021, Jane Street Europe experienced a relatively large revenue decline due to the cliff-like decline in Principal Transaction revenue (a year-on-year revenue decline of 86%);
The official response to the investigation was that the cause was 1) long exposure to certain emerging markets; and 2) short exposure to certain developed markets. "Long exposure to certain emerging markets" and "short exposure to certain developed markets, and the combination of exposures contributed to the 86% decrease in revenues."
In 2021, Jane Street Europe had a total of 332 employees, with Technology and Trading positions accounting for more than 70% in the past three years. In 2021, the per capita revenue was only 667,700 pounds, the employee salary expenditure was 267 million pounds, and the per capita salary was 804,700 pounds, which was a huge difference compared to the per capita revenue of 5,719,100 pounds and the per capita salary of 1,152,100 pounds in 2020;
Jane Street Financia's revenue is mainly composed of Management Fees and Performance Fees. Its headcount has grown steadily in the past three years (390 people at the end of 2021), and its revenue is relatively stable;
In 2021, Jane Street Financial's operating income was approximately 279 million pounds, with per capita revenue of 3,035,200 pounds, and employee salary expenditure of 126 million pounds, with per capita salary of 324,300 pounds.
VI. Fitch Ratings
On July 24, 2020, S&P assigned Jane Street Group LLC an issuer and senior secured debt rating of “BB-”;
On June 1, 2022, Fitch assigned Jane Street Group LLC's issuer default rating (IDR) and senior secured debt rating as "BB+" with a stable outlook;
As of now, Jane Street Group LLC has two outstanding debts with a total amount of US$3.05 billion, including a US$2.45 billion senior secured term loan with a LIBOR rate of 0.028% and a US$600 million senior secured note with a coupon rate of 4.5%;
Fitch's concerns about Jane Street Group LLC are reflected in:
a) The Company’s expansion into new regions and/or asset classes (such as cryptocurrencies) may result in higher market, balance sheet and financing risks;
b) Balance sheet exposure has grown significantly over the past 24 to 36 months, including continued inflows into ETFs and the deployment of new strategies and asset classes;
c) Compared with its peers, Jane Street holds a higher proportion of illiquid assets (such as Level 2 Assets) in its securities holdings, which may be subject to greater valuation impacts during market turmoil.
7. Position Setting
As a leading quantitative institution in the traditional field, Jane Street has clear job positions, consisting of three business segments: Trading, Technology and Infrastructure.
The educational background of employees is not disclosed in detail. By referring to the campus recruitment target school setting of Jump Trading, which is also a leading quantitative institution on Wall Street (only focusing on a few schools such as Harvard, MIT, Stanford, Princeton, Yale, UC Berkeley, UIUC, Caltech, etc.), and the graduate schools of Hudson River Trading employees (as shown below), we can infer Jane Street's requirements for the graduate schools of its employees;
In addition, according to Jane Street's WeChat official account and other channels, Jane Street only offers positions in the UK to masters of science and engineering and G5 PhD students at the University of Oxford, University of Cambridge, and Imperial College London; in China, it only holds campus recruitment events at Peking University, Tsinghua University, Fudan University, and Jiaotong University.
about Us
JZL Capital is a professional institution registered overseas, focusing on blockchain ecosystem research and investment. The founder has extensive work experience and has served as CEO and executive director of many overseas listed companies, and has led and participated in eToro's global investment. Team members come from top universities such as the University of Chicago, Columbia University, University of Washington, Carnegie Mellon University, University of Illinois at Urbana-Champaign, and Nanyang Technological University, and have served internationally renowned companies such as Morgan Stanley, Barclays Bank, Ernst & Young, KPMG, HNA Group, and Bank of America.
