Jane Street Capital

very good firm. do you go to MIT or something? most if not all traders at Jane pretty good with functional programming and seem to know their way around OCaml or similar

Yeah, I go to a school very similar to MIT.

caltech?

actually based on your posting time, i'll go with imperial/

Kids at MIT like schools do not sleep much.

well, i'm not saying jane street exclusively recruits from MIT, but they seem to value mathematical aptitude like none other, so I thought it was a pretty good guess on my part

good school...course 15 is where it's at

Definitely course 15.

They recruit at a few other ivys too..they recruit at mine (Penn). I'd agree that they value mathematical aptitude (they interview a lot of engineers).

If you start at junior trader level, which position will yield higher return expectation?

haha never thought i would hear someone laud course15 on the board. ive heard decent things about jane st., but literally interview consisted of the following: what is 63^2, give u a series of operations what do you come up with: 6*7 -4 +17 /3 kind of a waste of time.

I did not know there were that many people on this board who should or would even know what course 15 is. Wow, I guess I am not alone.

college for me was a matter of deciding between wharton and mit, so course 15 isn't a huge mystery to me haha. zonk: i've always heard that jane street interviews were more complicated than that with questions involving algorithms, geometry problems, and whatnot.

and which did you choose devin?

wharton. was in the management and technology program before bailing and am now going for a double concentration in finance and statistics.

maybe 2nd rounds it gets more complicated. i basically stopped after i got a series of just plain multiplication and addition. not how i want to think. know people there though that do well.

i had a second round with them... terrible;

it was exactly like the first round except 10x harder; they asked me 0 fit questions round 1 and a grand total of 1 fit question round 2. the guy didn't really seem to care about what i had to say but just went on to the quantitative questions

yea i got dinged

that sounds like it would be a good interview for a complete quant junkie though.

I go to MIT... course 15 is pretty much a joke. If you only major in course 15 and nothing else (like engineering, science...) you are *not* considered a quant person.

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Pretty sweet deal for your friend. I'm surprised they hired him to do macros though. Most of my comp sci friends who work at Shaw go straight into algo trading. But then again they get asked programming questions during their interviews, not brainteasers.

as far as i can tell this firm is baller.

The firm is pretty good, but I would not consider it on par with Shaw or other very large funds. The amount of money they manage simply cannot allow as much upside.

lol, no you're quite wrong here

haha quite. the size of the fund really has nothing to do with it. and remember, these guys aren't looking to pocket a measly 2% management fee, more like 100% of all profits.

the bottom line is, it seems like these guys rock based on what i've heard from interns and the general (finance) public. i respect the firm and anyone good/lucky enough to get in. that being said, what does "well capitalized" mean in terms of this firm? anyone have any idea how much capital they're really playing with?

with a faggy name like Jane Street Capital, who cares?

I was talking to a recruiter from Jane St. and he said that you can put some of your own money up for trading after the 1st year. He said they started w/ $2 million in 1999 and now have about $150 million (this was back in Nov 07).

"lol, no you're quite wrong here"

Are you honestly telling me you would take a position here over Shaw? If so, I think you are quite dull witted. I know people working at Jane who say it is "near the level of shaw"

isnt deshaw a hedge fund? Why are you comparing Hedge funds to prop firms?

Lets work out profit per capita to get an idea of what I am talking about. Shaw = 1300 employees, 35 billion under management. Lets say they return a very conservative 10% per annum. That would be 700 million from the 2% of assets and 700 million from 20% of profit, so on average 1.1 million per person.

Jane has 100 employees and 150 million under management. Even giving them the astronomically high return of 50% per annum (which I am certain they cannot achieve consistently), the average comp is substantially lower (0.75 million per person).

But what you fail to realize is that their in inequality. At shaw your general partners will a greater % of the compensation than at Jane Street. Since Jane Street is a prop firm it is likely that their distribution of income is more normally distributed compared to Shaw. I would argue that median income is potentially higher at Jane street assuming the average return. Furthermore if Jane Street has grown from 2mm in 1999 to 150mm now in 2008 thats average annual rate of return of 61%. yeah, bottom line your average person at Jane Street is likely better off than your average person at Shaw. But your superstars at shaw clearly are way better off than Jane Street.

Their 4th round interview for a SA gig (yes 4th round for a summer internship) was almost like a Math Olympiad.
Game theory, FORMAL proofs and some conditional probability.

Needless to say I wanna work there now even more!!

Actually, 61% would be underestimating their annual return by probably a significant margin. A big chunk of annual P&L goes to the employees. Admittedly though, capital can also be put in by the partners

For those computing fee figures at Shaw you should be using 3%/30% vs. the standard 2%/20%. Despite charging fees well above average, Shaw still generates above average returns and raises big $$$ from investors. And, of the 1300 employees, ~500 of them are based in India and even the best over there probably get paid a fraction of what people on this board would consider reasonable. This leaves a much greater pool of dollars to pay everyone else.

I don't know Jane Street and can't help with the per capita calcs that were being done above but I find it hard to believe that the ratio would be higher at Jane Street vs. Shaw.

As Steve Tyler of aerosmith once sang "Janie's got a gun", well if what i just read is correct, "Janie's got a put" would be more correct. Not sure long or short puts but this trade could really make or break them.

"Jane Street Capital LLC, a New York-based trading firm, had the biggest exposure to Bear Stearns's put options at the end of last year, according to regulatory filings, though it isn't clear if the firm held on to those positions through last week. "

CNBC reported that they bought them...

I think what he meant, the way I see that, is that Jane Street probably has a much easier time making a much greater % on their capital than DE Shaw, because of diseconomies of scale. Happens a lot. I'm sure though that an just about every level from junior trader to top dog, compensation is more at DE Shaw. But Jane Street still seems pretty highly respectable.

I have a phone interview next week not really sweating it I've been through a lot of math Qs, but the later rounds? Proofs? Really? That sounds very unusual to me.

Anybody else have experience / advice to contribute?

I did have proofs in my 3rd interview. Some questions on distributions and game theory too.