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Jane Street’s trading revenues almost doubled last year and boomed during the tariff-induced turmoil of the first quarter of 2025, as it generated profits rivalling those of Goldman Sachs and Morgan Stanley.
The group, which operates in equity, option and fixed-income markets, generated $20.5bn of net trading revenues in 2024, up 94 per cent from 2023, according to people familiar with the matter.
Trading levels at Jane Street surged further in the first quarter, as US President Donald Trump’s tariff proposals unleashed chaos in markets.
The results come as Jane Street looks to bolster its balance sheet by borrowing $1.35bn through high-yield debt markets on Wednesday, according to people familiar with the matter. The firm’s ability to thrive during market turbulence is helping its debt gain traction with investors.
“With Trump in office, they’re going to benefit from his policy volatility,” said one investor who planned to participate in the deal.
Jane Street expects to report net trading revenues of about $7.2bn in the first quarter, up more than 60 per cent from the same period a year ago.
That would exceed the $6.7bn in first-quarter trading revenues reported this month by Morgan Stanley and brings Jane Street within striking distance of the $8.6bn earned by Goldman.
JPMorgan Chase has the highest trading revenues of any bank, generating $9.7bn in the first three months of 2025.
The results show Jane Street’s growing power in global markets, as it elbows into a business once dominated by traditional Wall Street heavyweights. The company earned $12.96bn of net profit last year, up from $5.9bn in 2023.
Its strong financials have set up the company to be one of very few to test the “junk” bond market since Trump’s April 2 “liberation day” tariff announcement.
Although Trump has walked back some of the levies, the volatility and uncertainty about trade policy has all but frozen new deals to issue risky debt.
Jane Street’s new eight-year bonds priced with a coupon of 6.75 per cent, which is about 2.45 percentage points higher than the yield offered by a similarly maturing Treasury note. The difference, or “spread”, reflects the premium investors demand for taking the risk to lend to a company such as Jane Street, compared with the federal government.
One investor said the timing of Jane Street’s debt offering was good, given the market-making group’s record of success in times of volatility, such as during the Covid-19 pandemic.
“They’re just making massive amounts of money,” another investor said.
Fitch Ratings on Wednesday assigned Jane Street’s new bonds an expected rating of “BB+”, the highest grade the agency gives to speculative debt. Fitch analysts said Jane Street’s “growth has provided a more meaningful buffer against potential operational losses”.
Jane Street has borrowed in traditional US corporate debt markets to fund its expansion before. Rating agency Moody’s said it expected the company to use the new money it planned to raise on Wednesday to bolster its trading capital.
Firms such as Jane Street and its rival Citadel Securities have used the electronification of financial markets to capture market share from incumbent banks that had historically relied on voice trading.
Banks have also found their ability to take risk hamstrung by regulation since the 2008 financial crisis.
Jane Street’s role intermediating trades and market making — particularly in the world of exchange traded funds, where it is a dominant player — has bolstered its profitability.
One person familiar with the company’s financials said it was growing across all of its major business lines, including trading in equities, currencies and ETFs, with the group benefiting from “heightened volumes” in the fourth quarter.
Jane Street has spent heavily to recruit technology specialists to push its business ahead of rivals. It said it expected to spend $1.4bn on compensation in the first quarter.
The company expects net income to jump to roughly $4.6bn in the first quarter of 2025.
Jane Street declined to comment.
https://www.ft.com/content/24fea1d6-ba66-4b6b-814b-7bb72abfe58f
