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The Jane Street - What really went wrong?

The issue was never the profits. It was never even the volumes. So, what was the issue? Every financial intermediary, brokers, depositories, clearing agents, even regulators like SEBI operate within a structure where higher volumes mean higher fee collections It doesn’t matter whether those trades result in profits or losses for the trader. They earn their cut every time a trade is made. They make money regardless. There are many other institutions like Jane Street, who have enough volume at their disposal to move markets. But the real problem begins when those massive volumes are used with intent, to manipulate prices for profit. Imagine an auction.  You’ve planted agents all around the room. As soon as the item is presented, your agents start aggressively bidding,  not because they want to win, but to drive up the price. Genuine bidders fall for it.  You sell at a premium. You win. That’s manipulation. And when this happens in financial markets, it’s not just unfair to ...