Jane Street Becomes a Dealer on Leveraged ETF Swaps

Jane Street joins other dealers as a market maker on risky leveraged ETF swaps.

An ETF swap, also known as a synthetic ETF, is where the provider enters into a swap contract with a counterparty, typically a large financial institution, to replicate the performance of an index, asset or asset class, without owning the underlying securities.

The counterparty pays the ETF the total return of the index (or other asset) including dividends while the ETF pays a fee and the return of collateral to the counterparty.