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Jane Street

Jane Street is a global proprietary trading firm that trades a broad range of asset classes worth over $17 trillion. It is a leading liquidity provider in ETFs, equities, bonds, and other securities. While its revenues fell in early 2023, its profitability and conservative leverage are expected to remain high due to its expanding strategies.

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272 views9 pages

Jane Street

Jane Street is a global proprietary trading firm that trades a broad range of asset classes worth over $17 trillion. It is a leading liquidity provider in ETFs, equities, bonds, and other securities. While its revenues fell in early 2023, its profitability and conservative leverage are expected to remain high due to its expanding strategies.

Uploaded by

ayatirohatgi02
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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JANE STREET

TRADING.RESEARCH.TECH.

Company Analysis
INTRODUCTION
 Jane Street Capital, typically referred to as Jane Street, is a global proprietary
trading firm.
 The firm trades a broad range of asset classes on more than 200 venues in 45 countries
 They are a global liquidity provider and trading firm that uses sophisticated quantitative
analysis and a deep understanding of market mechanics to help keep prices consistent
and reliable.

NOTABLE INFORMATION
Number of offices : 5 Global
Number of employees : 2000
Number of securities : $17 trillion worth of securities
FINANCIAL
PERFORMANCE
 Jane Street's balance sheet exposures have grown materially over
the last three years, driven by strong market dynamics, including
continued fund flows into ETFs, where the firm is a market leader.
This, along with Jane Street's ability to grow in adjacent strategies,
has supported revenue and firm profitability at levels above those
experienced pre-pandemic. While net trading revenues fell in the
first half of 2023 compared to last year.
 It is expected that Jane Street's profitability to remain elevated
relative to its assigned rating over the near to medium term due to
the firm's efforts in building out expansive strategies from an asset
class and geographic perspective,
 Jane Street's GAAP balance sheet leverage is relatively low, at 5.8x
at 2023. Leverage declined from 6.2x a year ago, driven by strong
earnings and reasonable capital distributions. Jane Street's tangible
capital base has increased by almost $17 billion since the end of
2019, supporting the firm's balance sheet growth. With member
withdrawals expected to be nominal in the context of earnings, the
firm's rating reflects that leverage will remain conservatively
managed.
 Jane Street's funding profile is viewed as limited given its fully
secured corporate debt profile and reliance on confidence-sensitive
secured prime broker facilities. Corporate debt includes a $2.45
billion senior secured term loan due in January 2028 and a $600
million senior secured note due in November 2029. The remaining
portion of funding comprises short-term debt positions, repo
transactions and securities loaned, as well as trade payables , which
can be highly confidence sensitive.
CLIENT OFFERING

Electronic trade offering

Trading expertise

Cross-asset liquidity and


global footprint
CROSS-ASSET LIQUIDITY
 Jane Street is widely recognized as one of the world’s leading ETF liquidity
providers, with trading spanning both the primary and secondary ETF
markets. They trade $3.9trillion in EFTs
 They are active in bilateral, off-exchange markets. In the US, the
wholesaling unit trades directly with many of the biggest retail brokerage
firms in the world. In Europe, we stream liquidity to trading firms via our
systematic internalizer, JX-EU .They trade $4trillion in global equities
 Jane Street provides bond liquidity across the globe on all major electronic
trading platforms and through direct OTC trading with clients, pricing more
than 16,000 bonds. They maintain a leading position in portfolio trading
and on major electronic platforms, while continuing to provide the direct
client service expected in the global bond market by trading $1.4trillion in
bonds,
 They also trade $1.5trillion in stock options and digital assets. Jane Street’s
fast-growing options business services a variety of client needs across
nearly 3,000 option classes.
CROSS-ASSET LIQUIDITY

ETFS
EQUITIES
BONDS
OPTIONS AND
STOCKS
JANE STREET OVER THE YEARS
 Jane Street's GAAP balance sheet leverage is relatively
low, at 5.8x at 2023 compared to capitalization and
leverage benchmark range of 10x-15x for securities
firms with high balance sheet usage.
 Leverage declined from 6.2x a year ago, driven by
strong earnings and reasonable capital distributions. Its
has been noted that Jane Street's tangible capital base has
increased by almost $17 billion since the end of 2019,
supporting the firm's balance sheet growth. With
member withdrawals expected to be nominal in the
context of earnings, the firm's rating reflects that
leverage will remain conservatively managed.
CONCLUSION
 Jane Street's rating reflects its strong, established market
position as a technology-driven market maker in the
exchange traded fund (ETF) market across various venues,
its size and scale, and its strong operating performance which
has augmented capital and supported the firm's appropriate
leverage profile over time.
 Its balance sheet exposures have grown materially over the
last three years, driven by strong market dynamics, including
continued fund flows into ETFs, where the firm is a market
leader. This, along with Jane Street's ability to grow in
adjacent strategies, has supported revenue and firm
profitability at levels above those experienced pre-pandemic.

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