Jane Street Archives

Nerd Heaven #

I spent the first two weeks of my Jane Street internship at the Sheraton in Parsippany, New Jersey. The previous summer, Jane Street began its internship by renting out a hotel in upstate New York to use as a COVID bubble. Summer camp went so well that they decided to do it again the next year, for fun.

I found myself in something akin to Rick Riordan’s Lotus Hotel, but designed for nerds. Pinball machines and old Atari video games cluttered the lobby. Row upon row of computer terminals, monitors, headsets, custom keyboards, and wifi repeaters filled the ballroom. At the end of every hallway stood tables filled with snacks and well-stocked refrigerators: Ito-En, Cold Brew, Tony’s Chocolonely, That’s It energy bars.

The only thing I couldn’t find was my fellow interns. The hotel’s least popular attraction, the pool and hot tub, contained only two or three out of 180. At last, I found them: in a windowless conference room, the rules to a made-up poker variant were written down on a massive whiteboard. Hundreds or thousands of dollars were riding on each game.

Everyone spoke using vocabulary borrowed heavily from the symbology of math papers (‘epsilon,’ ‘Nash,’ ‘exploitable,’ ‘Beta’). I had instant fluency in a language I had read but never spoken. It was thrilling; like Harry Potter must’ve felt speaking Parseltongue for the first time.

I arrived in nerd heaven expecting to feel at home like I never had before. I wrote hundreds of lines of code to optimize drafting my fantasy football team. During my free time on my gap year I worked through the problems in Knuth’s The Art of Computer Programming. My siblings called me ‘Robotie’ instead of ‘Robbie’ growing up after they caught me reading an anthropology book about facial expressions, unfortunately titled Emotions Revealed.

In college I was welcome in many places but normal nowhere, my personality too eccentric and contradictory. I foraged for weeds on my barefoot runs to class and raced pledges in consuming beer and raw onions and gave up toothpaste for a year on a hunch that nothing bad would happen. So trust me when I tell you that the nerdy and bizarre responses of my fellow interns on our get-to-know-you questionnaire elated me. At Jane Street I was downright mainstream. I would later learn that a fellow intern said this about me: “That kid Robbie, he doesn’t wear shoes, yet somehow he’s like the third most-normal guy here.”⁠^[1]

Here are some “hobbies and interests” from our questionnaire.⁠^[2]

• “CTFs⁠^[3], video games (CSGO, Final Fantasy, Last of Us, etc.), drinking OJ”
• “Hackathons, Chores (e.g. cleaning floor), cooking, playing table tennis”
• “AR/VR, Retrocomputing, Cooking/Baking and video production”
• “Sport Climbing, Custom Keyboards, Crypto”

My hobbies and interests were “Climbing, running, foraging, yoga, reading, teaching, all things crunchy-granola.”

Responses for “What’s the most interesting thing about you?”

• “I’m a casual dishwasher evangelist”
• “I am on a Major League Quidditch team” (x2 !)
• “I set up a Ethereum mining setup with over 30 GPUs in our house once”
• “I have a running tier list of every single place I’ve eaten at over the past 5 years (I also have separate ranking lists for every single Dorito flavor, Poptart flavor, and other snacks)”
• “I can play chess blindfolded”⁠^[4]
• “I am anosmic and I speak 9 languages”
• “At the beginning of quarantine, I (accidentally?) stayed indoors for 90 consecutive days.”
• “Tried to drop out school and become a professional E-sports player but failed”
• “At one point in my life I could solve a Rubik’s cube in less than 10 seconds”

Again, my response: “Three years ago I started running barefoot and I’ve never gone back. I’ve done a couple half marathons with a full one coming soon I hope!”⁠^[5]

It’s Plus EV #

The first thing you learn as an intern is that the only important thing about a bet is its expected value (almost). For small amounts of money, risk is irrelevant. And that’s ‘small’ by Jane Street standards. There’s a man who walks around the Christmas party every year with about $40k in hundred dollar bills who will flip a coin for as much money as you like,⁠^[6] with an informal minimum of $100. He gets hundreds of takers.

Tyler’s birthday fell on the third day of the internship.⁠^[7] We sang him happy birthday at dinner. Doug, a fulltimer, had a Cheshire Cat grin on his face as soon as the singing began. Once the final note sounded he promptly got up, telling our table “I’m going to go give that kid some money.”

Doug sauntered over to Tyler and told him the deal: “I’m going to flip a coin. If it’s heads, you’ll pay me $n$ dollars. If it’s tails, I’ll pay you $3n$ dollars. You get to pick $n$.” Tyler greeted this proposition not with a slack jaw or a furrowed brow, but with a grin. This was by far the most generous bet anyone proposed in my time at Jane Street. Doug knew how good this deal was, and to Doug’s surprise, Tyler did too.

“Up to a thousand!” Doug blurted.

“Done. One thousand it is.”

When Doug came back to our table, he told us this story. “Thank God the kid won,” he sighed. He opened his wallet, counted 27 Benjamins, and called over another fulltimer to get the rest of the cash he needed. He insisted on $100 bills. Within 3 minutes of losing the flip, he handed Tyler $3000 in cash.

Any intern unwilling to take bets like this was a schmuck. At work dinners, fulltimers would frequently offer interns coin flips where they stood to win $102 or lose $100. If you said no, you would get grilled, implicitly accused of behaving irrationally.

It was OK to accept a -EV bet that had entertainment value. Sebastian, a friend of mine, found several people willing to gamble that he couldn’t eat an orange peel in a minute. Once all the bets were in, he tried and failed. I was at the height of my frat era, so an orange peel was light work. I resolved to try the next day.

After finishing work, my mentor asked me where I was headed. I told him about the orange peel I was about to eat. He came along to watch, and wagered a bunch of money on me. “I want to support you!” he said.

The peel was easy to swallow in a minute, as I had expected. But the huge number of people willing to bet against me made me too conservative. I made about $250 from my wagers, my mentor about $350.

I tell you all this, and yet one of the most frequent topics of discussion around lunch in Parsippany was ‘interns are so conservative with their gambling these days. Back when I was an intern…’ The previous summer, a girl had made five figures betting on how many free throws she’d make out of 50.

Out of Your League #

About 1/3 of the Jane Street internship is lectures and homework, and about 1/3 is spent on research projects. But the most fun part by far is mock trading.

If you want a taste of what mock trading games are like, I suggest you go to figgie.com. There you can learn and play a card game designed to teach Jane Street interns how to trade. It will only take you ten minutes to learn the rules, but there’s enough complexity in strategy to keep interns thinking for weeks.⁠^[8]

As the summer goes on, games more and more resemble real markets. You play in a team of four on a simulated electronic exchange, with both bots and other Jane Street teams trading against you. The rules are different every time, but usually your job is to figure out which bot is making bad trades and transact with it before the other teams do.

Good mock traders can do math and game theory in their head. They shout whenever good opportunities arise. They type at blazing fast speed. Their brains simultaneously process several information streams: order books, price graphs, two teammates’ unrelated mathematical arguments, a rule change from over the loudspeaker, a sigh of displeasure from a coach. In the mock trading room there is a 3-foot-diameter gong that the organizers strike as each round begins. In bad mock traders this sound, and everything else about the experience, induces panic.

Many a genius has been humbled by mock. I once sat down excited to trade, until a teammate pointed behind us and said “you see that team we’re up against? Three out of four won a gold medal at the IMO.”⁠^[9] During my internship, someone looked up the top 100 eighth graders at math when we were all in eighth grade, and discovered that 35 of them were current interns.

Think Like a Streeter #

When trading, you almost always think in terms of expected value, not risk. So I’ve never split the bill at a dinner with Streeters. We pull straws⁠^[10], and the loser pays. You pay the same amount as you would splitting the bill, on average.

Trading requires paranoia. If a stock is trading below its true value, why hasn’t someone else bought it already? And who is stupid enough to sell it to you below market value? Are you the sucker? This effect is called adverse selection. Trading teaches you to see it everywhere. An empty restaurant is adverse. So is the Citibike closest to the subway station. The bar that let you in without a cover, the out-of-your-league girl you matched with on Hinge, the food left over at the summer party. If these are good deals, why hasn’t someone taken them already? You’ll make better decisions thinking this way, but you’ll also be cynical.