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

bbobstax about 3 hours ago 70 commentsRead Article on ft.com

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jxf•30 minutes ago

The real headline is buried in the article:

> 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.

bflesch•24 minutes ago

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..

loeg•22 minutes ago

> Are they "trading" or "high-frequency-ripping-off-retail-investors"?

HFT doesn't cost retail investors anything.

SanDiegoSun•18 minutes ago

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.

ianm218•20 minutes ago

Isn’t Ken Griffin still considered very clever? Citadel is one of the most successful hedge funds of the is era and has largely accelerated since 2020.

Taikhoom10•16 minutes ago

hedge funds are extremely volatile and tied to capital cycles - https://s-1.vercel.app/posts/the-capital-cycle-theory/

fancyfredbot•about 1 hour ago

Original headline is "Jane Street suffers $15bn loss in July market ructions".

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.

jason_s•20 minutes ago

>by implying that situational awareness directly caused losses at JS.

Correlation is not causation.

Taikhoom10•15 minutes ago

Well, they did because JS owned a economics interest in SA, which led to the loss. So it was poor capital allocation, but really a systemic failure to delete leverage from the equation.

fancyfredbot•1 minute ago

This loss considerably exceeds the amount of capital JS would have invested in SA. For context, at the time of the JS investment SA had a grand total of $20bn AUM across all clients.

int32_64•32 minutes ago

Ever since the infamous work of some of their alumni I have wondered what the culture of JS is actually like.

SanDiegoSun•16 minutes ago

Read about their talent acquisition process and interview days. They certainly attract the most brilliant people, but it’s important guard rails are kept on them lest they repeat the same missteps their alumni have taken.

mcmcmc•25 minutes ago

Same as any other hedge fund: avarice.

otterley•about 2 hours ago

They're still up $25B for the year, so it's hard to feel bad for them :-)

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.

alberth•9 minutes ago

$25B is less than people realize.

They have $140B AUM.

So they are up ~18%.

https://observer.com/2024/11/jane-street-quantitative-tradin...

tombert•18 minutes ago

I've applied to Jane Street dozens of times, interviewed twice, and have always been declined.

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...

loeg•21 minutes ago

> They're still up $25B for the year, so it's hard to feel bad for them :-)

No, even better: they're still up $40B for the year.

Lerc•about 1 hour ago

Their nerd sniping is top notch. I almost accidentally applied for a job with them.

jaggederest•20 minutes ago

I regret not going through their application process 20 years ago, when I didn't know better. They did some kind of job fair thing and their starting salary was mindboggling, back when $600k/yr was "work there for 3 years and retire" kind of money.

bmitc•43 minutes ago

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/

fancyfredbot•34 minutes ago

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)

SanDiegoSun•14 minutes ago

Almost none of their ops is done there.

otterley•21 minutes ago

My mistake! I must have mixed up that location with another company I also admire.

tolugenius•about 2 hours ago

Archive link (https://archive.is/20260814213548/https://www.ft.com/content...)

Pretty short so I imagine more details and analysis are forthcoming.

totetsu•about 2 hours ago

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

dmix•about 1 hour ago

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.

fancyfredbot•about 1 hour ago

He's offering entertainment not investing advice.

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.

mitthrowaway2•36 minutes ago

Is there anything he's said in particular that, given the benefit of hindsight, you feel has turned out to be misleading in retrospect?

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.

newsomix9xl•14 minutes ago

Sort his YouTube videos by date and go to his oldest videos. He didn't used to do that.

So you can blame him for that style lately, but its not all he can do.

inigyou•about 1 hour ago

That leaves basically nobody.

bb-connor•about 1 hour ago

100%

thechairman12•about 1 hour ago

agree

redwood•about 2 hours ago

Really weird writing and grammar errors. Odd

JumpCrisscross•about 2 hours ago

“By our calculations, Jane Street ponied up a one-off $200mn to do the deal and then locked in a further $200mn of costs per annum, at least in part, to avoid us gawping at their numbers every quarter. Wowsers” [1].

[1] https://www.ft.com/content/28a51284-98cc-4767-a306-0540d2656...

jt2190•about 2 hours ago

> Jane Street has generated more than USD 40 000 000 000 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.

JumpCrisscross•about 1 hour ago

Sure. It’s still an embarrassing hit they’d want to keep secret, particularly if they’re still in those positions. Paying hundreds of millions to hide a $15bn MtM loss makes sense.

wmf•about 1 hour ago

If SA's losses were around $30B does that mean Jane Street owned half?

fancyfredbot•44 minutes ago

All the article really says is that JS lost money in July.

The title has been editorialised (original headline didn't mention SA). The text just mentions the July market ructions included SA losses.

choult•about 2 hours ago

https://archive.is/05jR7

lz400•about 2 hours ago

It's all so sketchy. Jane Street were investors in SA but presumably were much more sophisticated and savvy than Leopold. When SA got in trouble, 3 firms got into a bid war for the assets at fire sale prices: Citadel, Jane Street and a third I forgot. Citadel outbid the other 2, but it's all weird, like Jane Street wanted in on the popular boy's book that they knew was going to tank and just were waiting around in the water like sharks.

JumpCrisscross•about 1 hour ago

Nothing about any of that is sketchy. It’s in their mutual interest to avoid a fire sale.

lz400•39 minutes ago

It’s sketchy to invest in a fund they probably knew full well had terrible risk practices and was likely going under on the first drawdown.

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.

Aurornis•about 1 hour ago

> like Jane Street wanted in on the popular boy's book that they knew was going to tank

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.

lz400•41 minutes ago

One theory (I don’t necessarily believe it): Jane Street was after the private part of SA’s portfolio (Anthropic), which is difficult to come by. Losing a few million dollars investing and getting in that network was worth it for them to try to groom Leopold to eventually sell them the private stake

catchnear4321•29 minutes ago

is it unreasonable to say that Jane Street was simply paying a small price for some situational awareness?

brcmthrowaway•43 minutes ago

What is Jane Street doing these days? Still HFT MM?

mattlamz•39 minutes ago

A little bit of everything

naveen99•about 1 hour ago

The bigger hit will be all their star quants going full solo (supervised with Claude).

giraffe_lady•about 1 hour ago

Fuck, ocaml's never getting row polymorphism now, my day is ruined.

surgical_fire•22 minutes ago

They were not fully aware of the situation, it seems.

...

I'll see myself out.

camel_gopher•about 2 hours ago

Tragic

actionfromafar•about 2 hours ago

Explain

leoh•about 1 hour ago

https://en.wikipedia.org/wiki/Satire

rvz•about 1 hour ago

Jane Street doesn't care about this loss. But it is almost always the effective altruists accelerating their own downfall.

And yes, Anthropic included.

xhevahir•about 1 hour ago

And they're still making tens of billions this year. Whatever they're paying in taxes, it isn't enough.

deweywsu•about 1 hour ago

Who the heck is Jane Street? Oh, I see, they're a "quantitative trading firm", whatever that means.

xhevahir•12 minutes ago

It's a business that transfers wealth, at great speed, many many times per second, 24/7. HN users have a massive hard-on for them because their engineers are so skilled, but the broader social utility of their business is basically nil.

ahartmetz•about 1 hour ago

They trade stocks quickly with computers.

pstuart•about 1 hour ago

And quants!

sheepscreek•about 1 hour ago

AFAIK they’re like a hedge fund with quants that trades its own money. In fact, most people (everyone?) who works there is a quant. It’s the only way they trade. They are extremely profitable. Of course you can Google this and get a more accurate picture. I know them as the most famous OCaml shop.

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.

fragmede•34 minutes ago

What's the grumpy version of xkcd 1053? Anyway, Jane Street does high frequency trading on Wall Street, and they're kind of a big deal in that sector. They date back to 1999, with some IBM people. Other than the money, the reason they're interesting for HN is they're an OCaml shop and do a lot for that ecosystem. So if you're a computer language nerd and want to work in a functional programming language, but one that has real world applications, and make a lot of money doing it, Jane Street is the place to be!