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518 points bwfan123 | 173 comments | | HN request time: 1.345s | source | bottom
1. cs702 ◴[] No.44483909[source]
According to Indian regulators, every trading day Jane Street would:

1) buy large volumes of stocks and/or stock futures that are part of an index tracking India’s banking sector, early in the day,

2) subsequently place large options trades, betting that the index would decline or volatility would spike later in the day, and

3) later in the day, cash out of the large long positions, dragging the index lower, making far more money on the options trades than on the long positions.

Jane Street can and likely will claim the firm was only arbitraging away pricing inefficiencies, nothing more, nothing less. It was just business as usual, etc., etc.

However, given the scale of the operation, Jane Street's actions sure look like textbook market manipulation. Calling it like I see it.

replies(22): >>44483959 #>>44484082 #>>44484085 #>>44484194 #>>44484621 #>>44484974 #>>44485377 #>>44485557 #>>44485564 #>>44485830 #>>44485855 #>>44485873 #>>44486444 #>>44487132 #>>44487671 #>>44487911 #>>44487912 #>>44489362 #>>44490126 #>>44492949 #>>44497566 #>>44499330 #
2. stefan_ ◴[] No.44483959[source]
Hardly a sophisticated high tech HFT operation. Totally illegal of course, except in places that maybe don't have the regulatory rigeur.
replies(1): >>44483990 #
3. cs702 ◴[] No.44483990[source]
Hardly a sophisticated strategy, indeed, but Jane Street was earning like $1B/year of profit on it, according to https://news.ycombinator.com/item?id=44483691
replies(1): >>44484070 #
4. whatever1 ◴[] No.44484070{3}[source]
Someone has to pay for the OCAML maintenance
replies(1): >>44484853 #
5. naveen99 ◴[] No.44484082[source]
Ok, but what moron was selling them the puts , and not seeing the pattern after a couple of days of this ? Sebi logic seems questionable.
replies(9): >>44484167 #>>44484289 #>>44484580 #>>44484626 #>>44485596 #>>44485880 #>>44487404 #>>44490020 #>>44496789 #
6. Horffupolde ◴[] No.44484085[source]
So why can’t other players detect this behavior and trade with JS, removing their edge?
replies(3): >>44484238 #>>44484291 #>>44484592 #
7. lopatin ◴[] No.44484167[source]
Presumably retail options traders and less sophisticated firms
replies(2): >>44484312 #>>44488132 #
8. Den_VR ◴[] No.44484194[source]
Maybe, but given the reputation of Indian regulators I’m skeptical Jane Street’s only sin was the alleged market manipulation.

People may recall the matter involving Adani Group. https://hindenburgresearch.com/adani-update-sebi/

replies(1): >>44484217 #
9. dyauspitr ◴[] No.44484217[source]
Seems presumptive to slander an entire nations regulatory group on a single/couple of examples. By that metric the regulatory group in the US is completely bought out since they let 2008 happen.
replies(4): >>44484328 #>>44484365 #>>44484633 #>>44485638 #
10. cwmoore ◴[] No.44484238[source]
Point taken, but maybe gov’s a player too?
11. steveBK123 ◴[] No.44484289[source]
Retail
12. steveBK123 ◴[] No.44484291[source]
The other firms compliance departments
replies(1): >>44484307 #
13. Horffupolde ◴[] No.44484307{3}[source]
The other firms are not manipulating the market. They are just riding along the manipulator.
replies(1): >>44484455 #
14. naveen99 ◴[] No.44484312{3}[source]
Yeah, I think volatility in the indian market was way too low, and Jane street just juiced it. normally that would be a losing proposition, but too many existing players were short volatility habitually… answer is not to kick Jane street out, but to enjoy the taxes Jane street pays on the gains…
replies(1): >>44484426 #
15. sealeck ◴[] No.44484328{3}[source]
There's a difference between "letting" something happen and actively doing something – it shows very different intentions. The events of 2008 were also caused by a cascading system failure involving lots of different components, which are hard for a single human to fully understand. The actions of the Indian regulator in the Adani case are much simpler, and their motivation is straightforward.
replies(1): >>44484359 #
16. dyauspitr ◴[] No.44484359{4}[source]
One rotten regulator doesn’t mean you get to view the entire Indian regulatory environment as unreliable though. It’s the 4th/5th largest financial market in the world.
replies(2): >>44484496 #>>44485675 #
17. Den_VR ◴[] No.44484365{3}[source]
Slander? Now there’s a strong word.

Examples of the 2023-2025 activities of the Indian securities regulator SEBI seem pretty relevant to current news involving SEBI here in 2025. Which is the topic of discussion. Whatever US regulators were doing in 2008 has nothing to do with this.

18. lumost ◴[] No.44484426{4}[source]
Low volatility is good for everyone engaged in long term asset management. Jane Street just found a way to make everyone else less money while making a small amount for themselves.
replies(1): >>44484554 #
19. anticensor ◴[] No.44484455{4}[source]
It is a crime to assist a crime.
replies(1): >>44484492 #
20. Horffupolde ◴[] No.44484492{5}[source]
You are not assisting. If anything you are making it less profitable.
21. Den_VR ◴[] No.44484496{5}[source]
Is SEBI not the key regulator in this area?

To say it plainly, SEBI has been exposed for their selective enforcement on high-profile entities. If Jane Street’s in trouble with SEBI then it’s only because they failed to secure the same privileges as Adani, or Karvy, or Ramkrishna, or Sapre, or Kamath.

22. MichaelZuo ◴[] No.44484554{5}[source]
> Low volatility is good for everyone engaged in long term asset management.

According to who?

There are plenty of pension funds nowdays that have people specialized in picking up mid sized companies after big drops.

replies(1): >>44484765 #
23. msgodel ◴[] No.44484580[source]
Yeah that seems like it should push the premium higher. Even if it's some institution with very bad quantitative models eventually the careless put writers should run out of shares/capital to secure the puts with and get liquidated.
24. posnet ◴[] No.44484592[source]
Most exchanges do not reveal counter-party information smaller than the broker level. So you wouldn't know just from looking at market activity the same person causing the large futures move was also taking large options positions.
replies(2): >>44484698 #>>44485926 #
25. conditionnumber ◴[] No.44484621[source]
Don't know about Jane Street, but that sounds like a general problem.

If options & futures are more liquid than the underlying, someone will be tempted to nudge the underlying.

Bond ETFs and their options chains seem like another locale where this could happen.

replies(2): >>44484723 #>>44485530 #
26. pclmulqdq ◴[] No.44484626[source]
I assume the moron in question was using Black-Scholes or some similar formula to price those options, and refused to update their prior when they lost money day after day. This happens quite a bit in derivatives markets.
replies(6): >>44484797 #>>44484898 #>>44485128 #>>44486986 #>>44487679 #>>44487861 #
27. CPLX ◴[] No.44484633{3}[source]
> By that metric the regulatory group in the US is completely bought out since they let 2008 happen.

Not sure that makes the point you think it makes.

28. londons_explore ◴[] No.44484698{3}[source]
Doesn't matter - see a pattern, exploit it - and in doing so, make profit yourself whilst reducing the pattern.
replies(3): >>44485103 #>>44485961 #>>44486244 #
29. ivape ◴[] No.44484723[source]
I have a suspicion this has been happening with a particular MAG7 stock these last few months, but I can't fully convince myself such a large stock can be manipulated like that.
replies(3): >>44485166 #>>44486121 #>>44487805 #
30. mrcode007 ◴[] No.44484765{6}[source]
it’s a known effect. Without going into details here, you can calculate first crossing time of a barrier in a stochastic process and observe that often the first crossing time decreases as the volatility increases. From there you can set one barrier at 0 (default) and draw your own conclusion.
31. isatty ◴[] No.44484797{3}[source]
But why would they refuse to? They're there to make money too, after all.
replies(1): >>44485333 #
32. ldjkfkdsjnv ◴[] No.44484853{4}[source]
all that OCAML we only hire the smartest is often a veil for what is really a simpler operation that is borderline illegal. probably alot of employees dont even really understand the systems they work on
replies(2): >>44486000 #>>44486764 #
33. andrepd ◴[] No.44484898{3}[source]
That's not really how it works, the market making firms would essentially have to update their vol curves in response to that signal (BS being essentially just a coordinate change from price to volatility).
34. theirjehdirhdij ◴[] No.44484974[source]
Unsurprising that unethical but "righteous" crooks like SBF and his pals came out of that place.

I imagine Jane Street will also justify this with some EA bullshit, or like Soros during the 97 crisis just say "someone would do it ; may as well me".

35. efavdb ◴[] No.44485103{4}[source]
Yes claim is price is high at open low at close. Seems pretty straightforward.
36. rybosworld ◴[] No.44485128{3}[source]
Black-Scholes is rarely used to actually price options. It's most commonly used to back out what the current implied volatility is.
replies(1): >>44485138 #
37. pclmulqdq ◴[] No.44485138{4}[source]
Things like Black-Scholes (using past volatility of the underlying to model the probability distribution in the future) are often used by market makers to price options, but the vanilla version never is.
replies(1): >>44485215 #
38. pclmulqdq ◴[] No.44485166{3}[source]
At least one of those stocks tends to have a comparatively thin order book.
replies(2): >>44485281 #>>44485581 #
39. rybosworld ◴[] No.44485215{5}[source]
Any market maker pricing options with Black-Scholes won't be a market maker for long.

Black-Scholes is just a customer-facing description of the option (i.e, it provides greeks that everyone can understand). But it isn't used as a starting point.

In practice, MM will back out what the implied volatility is from current prices. Then a stochastic volatility model is calibrated against that.

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

replies(1): >>44486308 #
40. artemisyna ◴[] No.44485281{4}[source]
Oh?
41. kragen ◴[] No.44485333{4}[source]
Maybe they have buddies at SEBI who can freeze their counterparty's assets and return the half-billion dollars they lost back to them.
42. futevolei ◴[] No.44485377[source]
I’m not sure you are seeing it clearly..or have any trading experience whatsoever. They took substantial risk. There is always someone bigger so if they were wrong they could have been buried. Then they reversed. If there are allegations of insider trading or collusion or something else then I’m ready to pile on but I don’t see anything here.
replies(1): >>44485531 #
43. throwaway2037 ◴[] No.44485530[source]

    > If options & futures are more liquid than the underlying, someone will be tempted to nudge the underlying.
This is a weird statement. Why would liquidity matter here? As a point of reference there are generally two types of options: (1) options that depend directly upon the underlying, like a Tesla stock option, or (2) options that depend indirectly upon the underlying, like options on S&P 500 index futures. The liquidity in category 2 is normally tiny. Cat 1 normally has far less liquidity than the underlying.

Why is the adjective "more" important here? Even if less, the opportunity to profit is still good, assuming that one chooses the path of market manipulation.

replies(1): >>44485677 #
44. tyre ◴[] No.44485531[source]
Both can be true:

- They were taking a substantial risk.

- They were manipulating the market.

replies(1): >>44488730 #
45. throwaway2037 ◴[] No.44485557[source]

    > However, given the scale of the operation, Jane Street's actions sure look like textbook market manipulation. Calling it like I see it.
I am unsure that the US SEC would agree with you. Buying and selling "a lot" is not clearly market manipulation in the US.

Finally, in my view the India SEBI rules are insanely vague and are written to grant a lot of leeway to the regulator.

The real problem that no one is talking about: Why is India allowing its derivatives markets to explode? An estimated NINETY percent of retail derivs "investors" (I prefer the term "gamblers") lose money in India. Lots of these loses are gains for foreign banks and hedge funds. India: What the hell are you doing!?

replies(4): >>44486102 #>>44487022 #>>44487846 #>>44488430 #
46. dgfitz ◴[] No.44485564[source]
Jane Street called the bluff of that market. Occams razor.
47. throwaway2037 ◴[] No.44485581{4}[source]
Google tells me:

    > Coined in 2023, the group consists of Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla.
Which one?
replies(1): >>44485893 #
48. throwaway2037 ◴[] No.44485596[source]

    > what moron
In India, it is clearly retail investors in the recent retail derivs boom.
49. throwaway2037 ◴[] No.44485638{3}[source]

    > Seems presumptive to slander an entire nations regulatory group on a single/couple of examples.
How about Germany's BAFIN regulator after VW's Deiselgate or Wirecard bankruptcy? BAFIN's response was weak and slow in both cases. I am willing to slander them for "just" those two mistakes.
replies(1): >>44488131 #
50. fastball ◴[] No.44485675{5}[source]
Does the size of a market have some positive impact on the reliability of its regulatory body that I am not aware of?
replies(1): >>44487209 #
51. lmm ◴[] No.44485677{3}[source]
What matters is the volume rather than the liquidity per se, but the two are generally pretty well correlated. The point is that moving a market costs money, making a trade moves the market against that trade, so even if someone is deliberately trying to move a market they'll pay more than they could ever hope to recoup. The exception is when there's a derivative market that has more volume than the underlying - in that case profitable manipulation becomes possible, as you can spend to move the underlying, losing money, but making more money on the derivatives where you'd bought the other side.
replies(2): >>44485974 #>>44486724 #
52. olalonde ◴[] No.44485830[source]
I never quite understood why market manipulation is illegal. If market participants make emotional or irrational decisions detached from fundamentals, it should be on them.
replies(1): >>44486002 #
53. ◴[] No.44485855[source]
54. sillysaurusx ◴[] No.44485873[source]
When I worked at Scotttrade in 2010, I vividly remember my coworker telling me that this is what they did with the money too. I remember being surprised to hear that it flowed out in the morning and flowed back in in the evening. I never understood why that would make sense till I read your comment here.

It’s all hearsay; I’m just reporting what I heard. I don’t know the implications of it, but maybe this isn’t exactly uncommon behavior, even if it’s market manipulation.

The coworker said that the money flowed overseas too, if that helps contextualize it. No SEC, no problem, right?

Looks like Jane Street is an American firm, so, this all lines up and corroborates what you’re saying. What we’re seeing is probably the first time a government other than the US has reacted to this behavior.

replies(1): >>44485970 #
55. ◴[] No.44485880[source]
56. pclmulqdq ◴[] No.44485893{5}[source]
Tesla
replies(2): >>44486696 #>>44487033 #
57. 0xDEAFBEAD ◴[] No.44485926{3}[source]
Why not reveal counter-party info?
58. jayd16 ◴[] No.44485961{4}[source]
Simply look at the market patterns and make a profit, duh! Why doesn't everyone do that?!
replies(2): >>44487428 #>>44487878 #
59. hotep99 ◴[] No.44485970[source]
I'm sure they're doing it domestically too, but due to the relative size of the markets and currency conversions what amounts to a serious disruption in the Indian stock market would just be background noise that gets ignored in a US market.
replies(1): >>44486206 #
60. PartiallyTyped ◴[] No.44485974{4}[source]
Heavy gamma exposure also helps move the market by forcing dealers to hedge in some particular direction.
replies(1): >>44486104 #
61. senderista ◴[] No.44486000{5}[source]
We just send the rockets up, where they land isn’t our department
62. f33d5173 ◴[] No.44486002[source]
While markets are used as a form of gambling, they also have a prosocial purpose, namely to allocate capital which improves the economy and society at large. Market manipulation increases market volatility and hence hurts efficient capital allocation, without some other benefit for the market. Besides that, it requires large amounts of capital to do, and hence can be effectively regulated.
replies(1): >>44486141 #
63. adw ◴[] No.44486102[source]
It’s legal gambling (same as the retail crypto and stock trades in the US). I’d expect that the legalisation of sports markets in the US has meaningfully moved exploitable punters out of the markets and into the bookmakers.
64. toomuchtodo ◴[] No.44486104{5}[source]
During the memestock craze, retail traders were able to create a gamma squeeze due to this forced hedging.

https://www.nasdaq.com/articles/what-gamma-squeeze-understan...

replies(1): >>44487921 #
65. georgemcbay ◴[] No.44486121{3}[source]
> but I can't fully convince myself such a large stock can be manipulated like that.

I have the same initial reluctance to believe it that you do, but less so when I remind myself that we live in a world where the Social Security Administration sent out a mass email praising the passing of the "big beautiful bill".

I think our built-up understanding of how the US government functions at a baseline has not caught up to recent events. Especially in regards to how much regulatory bodies are doing their traditional jobs vs being forced to sit on their hands, or in some cases just not even existing anymore.

replies(3): >>44486320 #>>44486975 #>>44498416 #
66. olalonde ◴[] No.44486141{3}[source]
Most of the stock market activity is secondary trading, which has little to do with allocating capital. Trading existing shares just redistributes ownership.
replies(2): >>44486715 #>>44489153 #
67. ladberg ◴[] No.44486206{3}[source]
This strategy by definition wouldn't work if it was "background noise" because it relies on being able to move the market
replies(1): >>44486905 #
68. SpicyLemonZest ◴[] No.44486244{4}[source]
The pattern was exploitable only on the specific days that Jane Street was allegedly manipulating. How would you have figured out, without counterparty information and before noisy sales start dragging down the index, that day X is a manipulation day?

How would you have identified that there's even such a thing as a manipulation day? Do you have a model that tells you the objectively correct number of days a non-manipulated index should be lower at close?

69. mcakes ◴[] No.44486308{6}[source]
No - no market maker is using stochastic volatility. (L)SV is only used for exotics. Market makers use a tricked out Black Scholes where the 'secret sauce' is in how you apply the chain rule when you calculate the greeks.
replies(1): >>44491808 #
70. jeromegv ◴[] No.44486320{4}[source]
Someone gets it. If you keep cutting budget of people trying to make sure the rules are followed, what do you think is going to happen?
71. Workaccount2 ◴[] No.44486444[source]
And this is what some of the brightest minds in the country are being harvested to develop. One of the biggest ongoing travesties.
replies(8): >>44486610 #>>44486961 #>>44486970 #>>44486997 #>>44487361 #>>44488096 #>>44489149 #>>44489896 #
72. Ozzie_osman ◴[] No.44486610[source]
Well that and increasing Daily Active Users and ad revenue on social media and video platforms.
replies(1): >>44490543 #
73. bdangubic ◴[] No.44486696{6}[source]
except Tesla is not just car company but a taxi company and energy company and AI company and robotics company… 6-7 more decades and orders will be pouring in :)
replies(1): >>44487387 #
74. f33d5173 ◴[] No.44486715{4}[source]
The stock market has a number of essential components without which it could not exist, all of which support it's role in allocating capital. If there was no secondary market to sell their stock to, someome might not invest in the first place. If there were or were not market manipulators cheating others out of money, that would make no difference as to whether someone invested in a company.
75. throwaway2037 ◴[] No.44486724{4}[source]

    > What matters is the volume rather than the liquidity per se
What is the difference between volume and liquidity for the purpose of this discussion?

    > The exception is when there's a derivative market that has more volume than the underlying
This is wildly rare in public markets.
replies(2): >>44486796 #>>44486829 #
76. udev4096 ◴[] No.44486764{5}[source]
Most of them are willing to look the "other way". So much for innovation and brainwashing the brightest minds with capitalism brainrot
77. lmm ◴[] No.44486796{5}[source]
> What is the difference between volume and liquidity for the purpose of this discussion?

You're the one asking "Why would liquidity matter here?", you tell me. Like I said, they're correlated well enough that it doesn't really matter as far as I can see.

> This is wildly rare in public markets.

Yes, but it's what happened here.

78. greyw ◴[] No.44486829{5}[source]
Option markets are quite often more liquid than the underlying in India which is why Janestreet was able to pull that off.

Retail folks use options to gamble. Apps gamify access/trading. It's really odd like that.

79. solumunus ◴[] No.44486905{4}[source]
Stocks moving with extreme volatility is so common as to be background noise in today’s US markets.
80. noosphr ◴[] No.44486961[source]
Luckily, the majority of the brightest minds working on fundamental problems have recently been fired.
81. thierrydamiba ◴[] No.44486970[source]
Cash rules everything around me has been the slogan for this generation. Why wouldn’t they chase the biggest dollar?
replies(5): >>44487004 #>>44487024 #>>44487690 #>>44487990 #>>44489761 #
82. riffraff ◴[] No.44486975{4}[source]
As someone living in a country with very weakened democracy, getting emails from the government was the point I realized things were really messed up. If this is now happening in the USA, well, good luck.
replies(1): >>44487785 #
83. fn-mote ◴[] No.44486986{3}[source]
> and refused to update their prior when they lost money day after day

The market takes money from people with incorrect beliefs about economics and gives it to people with correct beliefs. ~~What is the problem here?~~

On second read, I think the parent was just intending a factual statement, which I am willing to agree with.

replies(3): >>44487837 #>>44495011 #>>44496674 #
84. fny ◴[] No.44486997[source]
Now consider crypto.
replies(3): >>44487007 #>>44487074 #>>44488062 #
85. Avicebron ◴[] No.44487004{3}[source]
By this generation please clarify you mean the ones that started this campaign in the 70s, not the subsequent lost generations of people who can barely envision owning a home with a graduate degree in engineering
replies(2): >>44487657 #>>44489865 #
86. jeffrallen ◴[] No.44487007{3}[source]
Jane St is probably manipulating crypto too.
87. riffraff ◴[] No.44487022[source]
Isn't the figure of retail losing money on daily trading similar in other markets?

I think eToro disclosed that on their app, people using CFDs were losing money 76% of the time.

replies(1): >>44499006 #
88. burnt-resistor ◴[] No.44487024{3}[source]
Dollar, dollar bill, y'all.

Those with the power will use it. So much for the "invisible hand" making everything "fair and efficient".

89. bwfan123 ◴[] No.44487033{6}[source]
Any stock with large retail options trading volume is ripe for shenanigans, and I can bet tsla is one of them.
90. penguin_booze ◴[] No.44487074{3}[source]
Well, they said 'brightest'; so let's not.
91. Gathering6678 ◴[] No.44487132[source]
My understanding is you need to be able to actually the market to be called market manipulation (e.g. pump-and-dump). If Jane Street alone can move the market in 1), it seems like the Indian stock market is not really liquid...
92. dyauspitr ◴[] No.44487209{6}[source]
Yes, trust. Fully gamed systems will not have large willing participants.
replies(1): >>44487216 #
93. fastball ◴[] No.44487216{7}[source]
A market being large doesn't mean it has large participants.

But even then (and as seems to be the case in this instance), the market might have large participants because they are the ones doing the gaming, and are therefore happy to participate (even if trust is low).

94. globular-toast ◴[] No.44487361[source]
Brightest minds in the world from what I can tell. They are particularly sickening in the way they specifically target certain demographics to come and leech for them.

Imagine becoming highly educated and then just using that ability to cream off the output of people who labour every day producing things that are actually useful. The tragedy is all the signals from society are saying this ok. Nobody questions the money. I got excited thinking we would 15 years ago, but nobody cares.

I guess if you're bright enough to come up with a solution you could be like Satoshi, or you could just work for Jane Street and suck as much as you can before you die.

replies(2): >>44487666 #>>44487888 #
95. mrweasel ◴[] No.44487387{7}[source]
Tesla is also Musk. The Tesla stock is currently tied closer to the shenanigans of it's CEO than it is to the fundamentals underlying the company.
96. dmurray ◴[] No.44487404[source]
I think the point is that retail investors were selling the puts, they predictably sold every day (or more likely, they predictably bought calls which is almost equivalent), and there were no other sophisticated market makers in the market.

That changes the description of part 2 to "subsequently experience retail investors placing large options trades with them" which is much more defensible market making behaviour - their early buying was in anticipation of later demand and really did involve taking a risk.

The truth is probably somewhere in between.

replies(1): >>44487575 #
97. yorwba ◴[] No.44487428{5}[source]
Usually, everyone does do that, which is why only hard-to-detect patterns remain profitable. Not something obvious like "buy options in the morning and sell in the evening" as in this example.

But maybe Jane Street only traded like this on some days, so you would need to know whether they had done so before you could hope to exploit them.

98. dmurray ◴[] No.44487575{3}[source]
To add to this, that behaviour would typically be OK in the US, with a good compliance department to keep you away from the worst of the grey areas.

If the SEC did investigate you for this, an important part of the case would turn on the extent to which your actions were "bona fide market making". And the regulator would also be more introspective about the market structure that allowed this to happen - why is there only one market maker? How did we allow a derivatives market much more liquid than the underlying?

replies(1): >>44494582 #
99. MichaelOldfield ◴[] No.44487657{4}[source]
Come on. How can you not be able to buy a house with an engineering degree? It's one of the best degrees out there.

Define buying a house.

replies(2): >>44488354 #>>44488691 #
100. MichaelOldfield ◴[] No.44487666{3}[source]
"I guess if you're bright enough to come up with a solution you could be like Satoshi, or you could just work for Jane Street and suck as much as you can before you die."

the outcome is the same. you're sucking money out of people.

101. ExoticPearTree ◴[] No.44487671[source]
> However, given the scale of the operation, Jane Street's actions sure look like textbook market manipulation.

Everything is public. How is Jane Street manipulating the markets? Feels more like the Indians are sore losers because they couldn't see the patterns that Jane Street did and they lost some money. They should up their game, not punish the winner.

replies(1): >>44487699 #
102. MichaelOldfield ◴[] No.44487679{3}[source]
it's not the 90s anymore
103. immibis ◴[] No.44487690{3}[source]
Of course they would. And by doing so, society collapses.

Aligning incentives so that what's good for the individual is also good for society is a politician's job.

104. immibis ◴[] No.44487699[source]
They didn't exploit a pricing pattern, they created one, which is market manipulation.
replies(1): >>44488273 #
105. georgemcbay ◴[] No.44487785{5}[source]
Thanks, we're gonna need it (the luck, that is).

We got email from a government agency that is weakened by the passage of a new law celebrating the passage of said law, so yeah that's not looking great.

106. reedf1 ◴[] No.44487805{3}[source]
Of course large stocks can be manipulated like this. But there is also normal oscillation, repeatable human psychological behavior (e.g. momentum, mean reversion), and just crowd murmuration. Be careful using your eyes to gleam patterns from graphs; you may find if you try to monetize these they vanish before you.
107. misja111 ◴[] No.44487861{3}[source]
Black-Scholes takes a couple of parameters. To get hold of them, in particular volatility, requires you to look at what the markets have been doing.
108. ExoticPearTree ◴[] No.44487878{5}[source]
> Simply look at the market patterns and make a profit, duh! Why doesn't everyone do that?!

I know your question was sarcastic, but not everyone is able to see patterns. And not every trader is as good as the other. Hence winners and losers.

109. jddj ◴[] No.44487888{3}[source]
> certain demographics

Huh. Interesting point. I guess I never thought about it when JS were the secretive OCAML hacking prop quant fund, but if they become just another use-size-to-win badguy I can see the angle.

110. never_inline ◴[] No.44487911[source]
Irony is jane street hires from prestigious Indian schools too, for pretty obscene salaries. These salaries get hyped and celebrated over newspapers.
111. never_inline ◴[] No.44487912[source]
Irony is that jane street hires from prestigious Indian schools too, for pretty obscene salaries. These salaries get hyped and celebrated over newspapers.
112. PartiallyTyped ◴[] No.44487921{6}[source]
And it was glorious! MMs sure learned though. Premiums have exploded now.
113. ozgrakkurt ◴[] No.44487990{3}[source]
Because they literally don’t need to, there is so much more in life than money. Current tech culture is garbage in terms of defining success, whole social media is filled with posts defining success as working 24/7, exploiting people around you and making exorbitant amounts of money.

A hardworking and smart person in tech really doesn’t need to try hard or sacrifice much to live a comfortable life in terms of finances. Hard part is the rest of the things in life really.

replies(1): >>44488034 #
114. XajniN ◴[] No.44488034{4}[source]
There is so much more in life only if you have money.
115. pjc50 ◴[] No.44488062{3}[source]
Much simpler: most of the instruments traded have no fundamental returns, so people can dispense with the pretense of running a real market and go straight to the gambling and manipulation that they want.
116. pas ◴[] No.44488096[source]
depends on how you define bright.

people who get stuck in finance - especially trading - are not that bright IMHO compared to the hopelessly curious stubborn ones who go into philosophy or hard sciences or other areas of research.

117. pjc50 ◴[] No.44488132{3}[source]
I'm reminded of how the UK financial regulator banned "binary options" trading, since this was nearly always a scam run against unsophisticated retail investors who wanted to gamble and lost the majority of their "investment".

(one of the Yes Minister irregular verbs: I am providing liquidity to the market, you are long vega, he is a degenerate gambler)

118. Lionga ◴[] No.44488131{4}[source]
That is not slander, you are being more then generous with them. BAFIN's employees were trading Wirecard for profit to skim profits, not just "weak and slow". Calling them highly corrupt is probably a fair statement and not slander
119. ExoticPearTree ◴[] No.44488273{3}[source]
> "While these actions were not a breach of any regulation"

^ quote from SEBI. Isn't market manipulation illegal pretty much anywhere?

120. nine_k ◴[] No.44488354{5}[source]
For instance, buying a house in Bay Area. Realty around NYC is not very affordable, too. But such places is where the engineering jobs are.
replies(1): >>44488384 #
121. lupusreal ◴[] No.44488384{6}[source]
If you get a real engineering degree instead of computer science slop, then your options for where to live and work (without relying on WFH trends going the right way for you) open up substantially.
replies(2): >>44488502 #>>44492714 #
122. joncrocks ◴[] No.44488430[source]
I think the SEC would say it's about intent. If your intent for buying/selling is to impact the price rather than buying/selling the asset in question, then you are trying to manipulate the market.

The size question is important here due to the fact that large quantities are likely to influence price (and everyone knows this) so you might need an strong alternative explanation for your actions.

123. MichaelOldfield ◴[] No.44488502{7}[source]
a real computer science degree from a good school is a real engineering degree. And you can do a lot of things with it. Pivot quickly.

an "information technology" degree that teaches React and stuff is not engineering.

This is the last website I would imagine people complaining they can't buy a house.

replies(2): >>44488525 #>>44491217 #
124. lupusreal ◴[] No.44488525{8}[source]
> an "information technology" degree that teaches React and stuff is not engineering.

Lol, is that really what you think I meant by real engineering? You have tunnel vision for computer tech.

replies(1): >>44492607 #
125. ace32229 ◴[] No.44488691{5}[source]
Here in the UK:

Average mechanical engineer salary (mid-career) = £45k Max mortgage based on salary = ~£200k Average house price = ~£292k

-> Most people with an engineering degree cannot buy a house

replies(3): >>44488889 #>>44491408 #>>44492628 #
126. futevolei ◴[] No.44488730{3}[source]
“Manipulation” is what? You want to create a rule that says a firm can’t buy more than x shares/dollars/% in a certain amount of time? Or if it does it has to hold onto those shares for a minimum time? A firm should be able to buy as much as it wants, subject to its margin requirements, and then sell whenever it wants, be it one second, one minute, one hour, one day…later.
replies(1): >>44522919 #
127. wuiheerfoj ◴[] No.44488889{6}[source]
Most people with a mechanical engineering degree cannot buy an _average_ house - not quite the same
replies(1): >>44489074 #
128. Urahandystar ◴[] No.44489074{7}[source]
Extrapolating your answer, Most mechanical engineering firms are not in the same areas as the cheap houses. So on your point, most mechanical engineers cannot buy a house that they can live in and get to work.
129. geodel ◴[] No.44489149[source]
Exactly, they are just so bright they don't know anything about the world or what are they doing.
130. mlrtime ◴[] No.44489153{4}[source]
Secondary trading enables risk transfer, which is important for allocating capital.

Your first sentence is somewhat accurate, your second is not at all, specifically "just".

replies(1): >>44491591 #
131. seanhunter ◴[] No.44489362[source]
Seems pretty straightforward depending on what large means here. When I worked in an algorithmic execution business of a broker, we had to always cap our order size as a percentage of average trade size and also cap our participation so we couldn’t ever be more than a certain % of the total market volume. This was precisely so that we wouldn’t ever push the market in the way JS are accused of doing here.

If you’re trading a large % of the market volume or your orders are large relative to anyone else, you can’t claim to be arbitraging as you are executing way beyond the capacity of any kind of arb. You’re just doing the old fashioned abusive market corner in fancy clothing.

132. UncleMeat ◴[] No.44489761{3}[source]
The criticism is largely of the system. The mechanism by which capitalism can improve society is by having pay be a incentive to create things that improve society, which people will then choose to purchase.

When the incentive instead rewards "how much money can you extract from others without improving their lives at all" we've headed in a very dangerous direction. You get the "we can make more money by making our product more aggravating" motivation that leads to dark patterns and all sorts of problems.

This sort of market manipulation stuff is just a very clear example of this pattern. Smart people not building useful products but instead fighting to crank a machine so that it spits more money in their direction.

replies(1): >>44489834 #
133. mistrial9 ◴[] No.44489834{4}[source]
> Smart people not building useful products

worse, those are the active smart people doing that.. for each one of them there are a hundred others trying to do everything and anything to become one of those.. its a pyramid. The competition between individuals is a feature. You bet it is on the lips of every one of those individuals their "top" credentials that sit them in that trading seat. In other words, for every quant geek on that trading group, there are a thousand other "almost top" people using their time, talent and effort to try to be one of those inner circle ones.

134. mistrial9 ◴[] No.44489865{4}[source]
here in the coastal West US, a mid-career policeman does not make enough money to buy a house and have children. A credentialed school teacher does not make enough money to pay RENT in many desirable places, and nowhere near enough to have children of their own and buy a house.
replies(1): >>44491214 #
135. phendrenad2 ◴[] No.44489896[source]
This seems like a play on "The best minds of my generation are thinking about how to make people click ads. That sucks." - Jeff Hammerbacher

But is it really? Is buying a lot of stock and selling it later really something that takes a genius?

replies(2): >>44490236 #>>44492260 #
136. StopDisinfo910 ◴[] No.44490020[source]
People buy puts for coverage. It's not strictly a speculative tool.
137. vovavili ◴[] No.44490126[source]
Isn't this just reasonably informed arbitrage?
138. yifanl ◴[] No.44490236{3}[source]
Doing so in a manner that generates a sufficient amount of profit really does.

And doing so without being caught for market manipulation might require genius that surpasses the human limit.

139. Workaccount2 ◴[] No.44490543{3}[source]
But those have a tangible return to society that people flock to. Almost the entirety of Google products is open to anyone on Earth to just open up an use because that ad model is so successful. People click high value ads and it covers to cost of video distribution to anyone with an cell phone and wifi.

Jane street on the other hand is arbitraging against regular folks money, so they can distribute the gains to their select high value clients. There is no free office productivity suite and limitless "How to repair cell phones to start your own business" videos distributed to everyone for free.

In a way, they are doing opposite functions. Ad media takes from people who buy stuff and gives to people who don't (or cant't) buy anything. Jane street and their ilk take from regular people and give to those who have everything already.

replies(1): >>44492804 #
140. datatrashfire ◴[] No.44491214{5}[source]
Major city police are typically some of the highest paid public employees of any area. Often with a more generous pension tier than what is given to other public employees. Ie starting pay for SFPD is $115k-$164k https://www.joinsfpd.com/entry-level-program
replies(2): >>44491550 #>>44492148 #
141. vonneumannstan ◴[] No.44491217{8}[source]
>This is the last website I would imagine people complaining they can't buy a house.

Even Senior+ level SWEs at FAANG's in Silicon Valley have trouble buying homes there. The costs are absurd.

replies(1): >>44492571 #
142. ralferoo ◴[] No.44491408{6}[source]
There are several counter arguments here.

Most people with an engineering degree are probably in a relationship, so they don't need to buy a house on a single salary.

There are plenty of houses for sale below the average price, just as there are plenty above.

Buying isn't necessarily the best option anyway. House price returns in the UK are somewhat below stock market returns, so as a pure investment it doesn't make sense. Unfortunately, we have the narrative in the UK that we should aspire to own houses, but that doesn't mean it's necessarily correct!

replies(1): >>44498095 #
143. Atotalnoob ◴[] No.44491550{6}[source]
164k isn’t enough to buy a home in SF.
replies(1): >>44492130 #
144. olalonde ◴[] No.44491591{5}[source]
I didn't say stock markets don't serve a useful purpose. Regardless, my original point is simply that traders should focus on fundamental value, not try to guess what others are thinking. If they choose to play that game and get burned, that should be on them. There's no real necessity to regulate "market manipulation".
145. rybosworld ◴[] No.44491808{7}[source]
Would be curious to know more about this.
146. BobaFloutist ◴[] No.44492130{7}[source]
starting pay.

Also, it's 164k a year, not ever. So whether or not it can buy a home in SF kind of depends on how long and how fast you save.

147. mistrial9 ◴[] No.44492148{6}[source]
you cited the top of the range, in the highest paying city in the West.. its not enough to buy a house there.
148. freejazz ◴[] No.44492260{3}[source]
Ask Jane Street, not the poster.
149. MichaelOldfield ◴[] No.44492571{9}[source]
I guarantee you, it's harder in 90% of places in the world (accounting for buying power/price of real estate). You guys don't understand our privilege.

You can buy an f'ing house. In places like Ukraine people make $100/month and apartments are $50k(and I'm talking before the war). There, it's LITERALLY impossible.

What people here are describing is that things should be better, and I agree, but words matter.

replies(1): >>44493402 #
150. MichaelOldfield ◴[] No.44492607{9}[source]
i don't know cause there's a ton of nonsense here so explain what you meant. and also what not being able to buy a house means.
151. MichaelOldfield ◴[] No.44492628{6}[source]
That means you can buy a house a little below average. With a spouse straight up can.
152. MrMorden ◴[] No.44492714{7}[source]
CS is a real degree, but it's more math than engineering. CS and engineering have nothing in common beyond math and physics prerequisites.
153. objektif ◴[] No.44492804{4}[source]
Your "ad" people are rotting the brains of entire generations by addicting kids using many different tactics (insta, YouTube shorts, TikTok....) . Please spare us the moral judgement.
replies(1): >>44493296 #
154. Mo3 ◴[] No.44492949[source]
Given the intraday patterns in the US and other stock markets I doubt this is limited to India
155. dmonitor ◴[] No.44493296{5}[source]
"brain rot" is a subjective criticism. objectively speaking, the kids are making art and sharing it with each other. it's at worst an extension of the entertainment industry. you can not like the art, but it's at least art.

the finance industry doesn't produce anything of value. it just turns $1 into $2 and liquidates productive industries.

156. nine_k ◴[] No.44493402{10}[source]
Google tells us:

In 2021, the median annual salary for software engineers in Ukraine ranged from $30,000 to $48,175, depending on location and experience. Some specific figures include $30,000 in Kyiv, $29,000 in Lviv, and $24,000 in Kharkiv. Remote software engineers in Ukraine had a median salary of $48,175.

It's quite below the EU median, but definitely not $100 a day.

BTW $100 a day is $12.50 a hour, which is more than the federal minimum wage in the US ($7.50 or so), and only $4 below California's minimum wage, $16.50.

157. torbid ◴[] No.44494582{4}[source]
Huh? I don't think the SEC would (just) apologize for letting you get away with manipulation of a significant portion of the US index funds just because they should have noticed you sooner.
158. cyanydeez ◴[] No.44495011{4}[source]
The market takes money like a bully most of the time. Any other belief is as theoretical as communism vs practice.
replies(1): >>44495749 #
159. Dylan16807 ◴[] No.44495749{5}[source]
If you're selling millions of dollars of options you're taking an extremely willing risk, not getting bullied.

Edit: Reading more about this, it looks like the counterparty is often a bunch of retail investors doing quick trades hoping the stock swings one way or the other, and that's not bullying that's gambling.

replies(1): >>44496215 #
160. nativeit ◴[] No.44496215{6}[source]
I agree with your edited point, and in response to sentiments I saw earlier in the thread—even gamblers deserve nominal assurances against cheating. My two cents, which I personally will be investing in wishes via my local wishing well, to which I’ve connected a dedicated fiber link to power my high-frequency algorithmic wish arbitrage desk.
161. have-a-break ◴[] No.44496674{4}[source]
Disassociates the value of the underlying assets which devalues the currency. Probably why regulatory bodies had to get involved.
162. ◴[] No.44496789[source]
163. helsinkiandrew ◴[] No.44497566[source]
Bloombergs Matt Levine does a good analysis of this and comes to the conclusion that the example the SEBI gives looks a lot more like arbitrage than manipulation. They were selling zero day options to customers and hedging with the underlying stock, which reduced the cost of the options to customers (whilst making a ton of money).

> The difference can be subtle, and I often joke that the difference between legitimate trading and manipulation is whether you send your colleagues an email saying “lol I sure manipulated that market.”

https://www.bloomberg.com/opinion/newsletters/2025-07-07/jan... (https://archive.ph/20250708012725/https://www.bloomberg.com/...)

replies(1): >>44499270 #
164. Peritract ◴[] No.44498095{7}[source]
> Most people with an engineering degree are probably in a relationship

This doesn't feel like a valid assumption.

replies(1): >>44498418 #
165. Shypangz ◴[] No.44498416{4}[source]
It’s tough to wrap your head around such big stocks being manipulated. I found that using mailsAI to track trends helped me see patterns I wouldn’t have noticed otherwise. It made the whole situation feel a bit more clear and manageable.
replies(1): >>44509669 #
166. ralferoo ◴[] No.44498418{8}[source]
Over half the UK adult population is married. According to the ONS, 61% of the population aged 16 or above is living with a partner. [1]

Unless the demographics of those with engineering degrees is significantly skewed towards singles, this feels like a very valid assumption. Of course, you might have access to better statistics by profession.

[1] https://www.ons.gov.uk/peoplepopulationandcommunity/populati...

167. throwaway2037 ◴[] No.44499006{3}[source]
In the UK, unlisted derivs (CFDs, etc) dealers that target retail are required to display in print and TV adverts what percent of customers lose money. It is always way more than 50%!
168. cs702 ◴[] No.44499270[source]
Thank you for sharing this. Levine is usually pretty accurate about this stuff. I've changed my mind. See my updated response here: https://news.ycombinator.com/item?id=44499330
replies(1): >>44500519 #
169. cs702 ◴[] No.44499330[source]
EDIT:

After reading the Matt Levine piece posted by https://news.ycombinator.com/item?id=44497566 , I'm no longer sure this is market manipulation.

The devil is in the details, and the details disagree with my initial take, so I'm changing my mind.

170. bwfan123 ◴[] No.44500519{3}[source]
I am not so sure, since the article does not explain the biggest source of profits which is the put-options that were "bought" by jane street ! It only talks about options that were "sold".
replies(1): >>44502293 #
171. cs702 ◴[] No.44502293{4}[source]
Maybe. I'm no longer so sure.
172. southernplaces7 ◴[] No.44509669{5}[source]
Sorry for asking but curious, how did mails.AI help you track stock movements? Isn't it just an email marketing assistant service?
173. salawat ◴[] No.44522919{4}[source]
I disagree. I don't think transacting for transacting sake is a good thing. If anything I just see it as a vehicle for both obfuscation, and a means with which to arbitrage info asymmetry against retail investors.

And no, I don't think merely adding liquidity is worth that being practicable and nigh-impossible to unwind.