Jane Street Is Flat on Situational Awareness. Its Own Book Lost the Money.
Its own note says the stake round-tripped to flat on the year, and that the firm largely lost on the same trades that had outperformed in Q2.
The claim: Every outlet led with Situational Awareness. Jane Street’s internal note says that stake round tripped to roughly flat on the year and the firm “largely lost on the same portfolio of trades that had strong outperformance in the second quarter.” The money went on its own book.
The numbers: $15bn hit in July against more than $40bn of trading revenue year to date. A 13F filed the same day the loss broke showing $575.58bn of puts against $472.94bn of calls. A credit spread that widened to about 330bp over a window in which the high yield market tightened.
The catalyst: The $14.6bn refinancing that priced on 12 August moves Jane Street’s debt from broadly held 144A notes into a narrow private placement, which collapses the audience for the only reporting that has ever shown this firm’s earnings.
Wrong if: Jane Street’s notes keep appearing in registered funds’ holdings filings after the refinancing settles, or the firm’s quarterly figures keep reaching the press at the same cadence.
