Local popularity of the high-frequency trading (HFT) firm soared further after the New York-based entity, which trades multiple asset classes worth hundreds of billions of dollars, made a βΉ4.3-crore job offer to a student from IIT Madras.
Here’s a look at how and why a hitherto publicity-shy Wall Street firm is going all out to build its presence on Dalal Street, among the top five capital markets in the world.
What does Jane Street Capital do?
It’s a fast-growing firm that uses complex computer programmes to trade across markets, asset classes and instruments, including derivatives and exchange-traded funds (ETFs). The use of automated software and mathematical models, popularly known as HFT, allows it to work with high precision and churn out big profits. Bloomberg data showed Jane Street is on course for record revenues in CY24, with net trading revenue surging nearly 80% to $8.4 billion in the first half. The firm specialises in high-volume trading, differentiating it from the storied Wall Street biggies like JP Morgan, Goldman Sachs and Morgan Stanley, which are also investment banks and brokers servicing clients world-wide.
How did the firm become so well-known suddenly in India?
Jane Street was engaged in a legal battle with peer Millennium Management and its two former traders in the US for allegedly stealing a secret options trading strategy for India. During the court proceedings, it emerged that the strategy had generated $1 billion in profits in 2023. According to a Financial Times report, Jane’s gross trading revenues came at a record $21.9 billion in 2023, up 34% from 2022.
The profit figure from India alone came as a shock to many here as a recent study by the Securities and Exchange Board of India (Sebi) showed about 93% of the retail traders incurred an average loss of βΉ2 lakh (per trader) during the past three financial years. That stoked a debate that foreign firms are benefiting at the cost of local retail traders. Jane and Millennium Management settled the case in the US last week.
Who gets hired by Jane Street?
HFT firms like Jane Street hire people with high mathematical capabilities along with a strong understanding of programming. Its employees come from top universities including MIT, Harvard University, University of Cambridge, University of Oxford, Princeton and Stanford. A trading desk job at Jane Street is highly sought after by students because of the bulge-bracket compensation. At the same time, these firms have only a few spots and the jobs go to the creme-de-la-creme at top B-schools and technology universities.
Why does Jane Street’s offer to the IIT student stand out?
To attract and retain the cream, Jane Street offers pay packages way higher than other companies in the HFT space. For the class of 2025 at the IITs, the company rolled out the highest annual salary offer of βΉ4.3 crore-plus – including base, fixed bonus, and relocation – to a student at IIT Madras. The top offers made by other leading HFT firms at the IITs range over βΉ2 crore per annum for international roles, while for domestic roles, the pay is even lower. The pay package reflects the high demand for niche skills like algorithmic trading, data science, predictive analytics and programming expertise.
How does Jane Street hire in India?
Jane Street only hires through the pre-placement offer (PPO) route at the top Indian Institutes of Technology (IITs), unlike the bulk of companies that participate in the on-campus final placements process. Internships at the HFT firm are open only to students from computer science and engineering (CSE) and electrical engineering. There’s a screening process followed by interviews, which focus on collaborative problem-solving, evaluating the student’s ability to reason about problems quantitatively, solve puzzles, brainteasers, probability-related questions, etc. The handful of selected students go through an internship and the firm rolls out PPOs on the basis of their performance during the period.
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