[infecto]

At the end of the day they are a prop firm. They are a business trying to make money and part of that is market making but it’s not solely market making.

You may not like it but we function in a capitalist society and as such the efficiency of markets is part of that. To have that happen usually requires the market as a whole participating and that includes firms like Jane Street. In the India case I don’t know if what they were doing was illegal or not, India is complicated and the laws there in my opinion are influenced not as much by standards but how well you scratch the itch of others. It is clear the option markets in India was/is highly inefficient in that Jane Street was able to pull the rug over and over. I would be curious who the counter parties were and if this is more about pride of Indian financial institutions not being competent instead of this being illegal. Thinking more about Hindenburg and how India reacted. In the US it feels like a gray area because at the end of the day the options market was clearly clueless on how they should be pricing the options.

Speaking from a US perspective people get thorny on these topics but I think it’s great that folks are always pushing the boundaries. This type of law is tested and we figure out what is ok and what is not. It’s often not cut and dry. Maybe Jane Street was entirely in the wrong in India and they will pay a price. Maybe not. Hopefully their markets learn and benefit from it.

I don’t believe any of us are in a position to say how folks should be spending their time. If we went down that road we could probably argue it back to nobody should be working and should simply be farming for our own food.

[whitexn--g28h]

The majority of counterparties were regular citizens, who did not understand that what Jane Street was doing was even possible.

Money is debt, you can’t make it without someone else owing it. Taking billions in profits from India’s stock market is pretty straightforward, millions of Indians lost their savings.

[infecto]

You’re not entirely wrong. India does have a problem with gambling and especially in Bank Nifty. I think something like 50% of options volume is retail, which is wildly high. Just because there is a gambling problem does not make it “pretty straightforward”. The courts will hopefully figure it out to their local pleasing.

Edit: I don’t think my point was clear. If you are going to allow retail in the options market, you should also be ok with sophisticated actors participating in it.

[antonvs]

> I don’t believe any of us are in a position to say how folks should be spending their time.

We obviously can't tell people how to spend their time, but we can point out that there might be moral reasons to avoid working in industries and for companies with particularly strong negative impacts on society.

> If we went down that road we could probably argue it back to nobody should be working and should simply be farming for our own food.

This is a classic false dichotomy. There are an infinite number of middle grounds between farming for our own food and an ultracapitalist dystopia in which morality is replaced by profit.

[infecto]

Sure, but that’s kind of my point, once you open the door to moral gatekeeping of jobs, it gets very slippery very fast. You can always trace the “negative impact” argument up or down the stack. That accounting software? It helps a business capture margin. That business? Probably acting as a middleman extracting value from someone else. Even compiler contributions ultimately fuel businesses optimizing for profit.

You’re right that there are middle grounds between subsistence farming and some caricature of ultracapitalism, but deciding where to draw that line in practice is messy. Pretending it’s obvious which industries are “moral” and which aren’t usually says more about someone’s priors than it does about some universal ethical framework.

At the end of the day, efficient allocation of capital, imperfect as it is, is what makes the system work. It drives productivity gains, lowers costs, and ultimately raises living standards across the board.

[antonvs]

> efficient allocation of capital

One big problem is that such claims are often cover for what amounts to theft. PE companies loading acquisitions with debt, for example, or "enshittification" - both tactics which are optimized to transfer wealth to investors, not improve the overall allocation of capital.

The idea that all these shenanigans are "efficient allocation of capital" is just propaganda, left over from decades ago before the system became what it is today.

This is where you need government intervention and controls, but unfortunately the US government is structurally and systemically unable to provide that. Regulatory capture, legalized corruption ("campaign finance", "lobbying"), money as speech, corporations as people - none of this is morally sound, and the justification that it's all in service of "productivity gains, lower costs" etc. is hollow.

> but deciding where to draw that line in practice is messy.

Of course - that's the nature of morality, it's inherently political. There would be no morality without other people. But that doesn't mean we should throw up our hands and give up on it.

[smokel]

It would be nice if smart people would not require law to operate in an ethical way. For complicated problems, and for people who are just plain stupid, it's nice to have law and law enforcement, so that capitalist society can work properly.

But the idea that smart people should "push the boundaries" to find out "what is ok and what is not" is either naive or borderline sociopathic IMNSHO.

[infecto]

I’m not being naive or sociopathic here, I’m pointing out how securities law actually functions, at least in the U.S. It’s rarely as cut-and-dry as you suggest. The courts exist precisely to resolve ambiguity, and there’s always some ebb and flow depending on the administration and the legal environment.

Before throwing around labels like “naive” or “sociopath,” it’s worth recognizing that a capitalist system relies on efficient markets, and efficient markets depend on laws being tested and clarified through the courts. That process benefits everyone.

I’m not making an ethical defense of any specific behavior. I’m saying that just because someone benefits from mispricing in a market doesn’t automatically make it unethical. The courts help define those boundaries. If you reject that premise and prefer a system without capitalism, then we’re simply talking past each other.

And for what it’s worth, tossing out loaded terms like “naive” or “sociopath” isn’t exactly an argument, it’s just lazy rhetoric. It’s ok for us to disagree but why use such a lazy argument?

[smokel]

I'm not opposed to capitalism, and enjoy its benefits everyday. I don 't however agree that efficient markets are required for capitalism. I also don't think that HFT is the only way to create efficient markets.

I do however believe that gaming the system for personal profit is unethical. The intention of the law might have been to build a playground for people to enrich themselves, but from a Christian standpoint, I don 't think this always works out well for society. I'm not a Christian, but I do like some of its values.

I was a bit disappointed about the suggestion that capitalism requires certain things that make Jane Street a necessity. This is not a fact, nor does the current process benefit everyone equally. Rejecting that notion, and possibly reading a bit too much into that, is what caused me to use said terms.

I do agree that we are probably talking past each other though :)