The Securities and Exchange Board of India (SEBI) has taken strict steps against the US-based trading firm Jane Street and three of its related entities. They have been barred from accessing Indian securities markets. This decision follows SEBI’s discovery of significant manipulation in index derivatives trading.
According to SEBI’s interim order, Jane Street and its entities made a profit of over Rs 36,000 crore in the last two years through trading in index options and futures.
SEBI identified illegal gains of Rs 4,843 crore, which must now be deposited into an escrow account (a secure account where funds are held by a third party until specific conditions are fulfilled) with a scheduled commercial bank.
SEBI observed a specific trading pattern used by Jane Street, especially on index expiry days. The firm would buy large amounts of Bank Nifty futures and stocks in the morning while aggressively selling Bank Nifty options. Later in the day, they would sell futures, impacting the closing level of the index.
For instance, on January 17, 2024, Jane Street reportedly bought Bank Nifty futures worth Rs 4,370 crore, sold options worth Rs 32,115 crore, and later sold futures worth Rs 5,372 crore, Jane Street’s trades resulted in a huge short position of Rs 46,620 crore in the options market. That day, the firm made a profit of Rs 735 crore from trading. However, it faced a loss of Rs 61.6 crore in futures and cash segments. ending the day with a net gain of Rs 673.4 crore.
On another occasion, on July 10, 2024, the firm engaged in similar activities, creating large short positions in both Bank Nifty futures and options. They reportedly earned a profit of Rs 225 crore by influencing a softer index close.
Overall, SEBI reported that the Jane Street group earned over Rs 43,000 crore from index options alone between January 2023 and March 2025. However, they also faced losses of about Rs 7,687 crore in the stock futures, index futures, and cash segments.
SEBI’s findings indicate that these trading patterns aimed not only to generate profit but also to manipulate market movement, which violates fair market practices.
Written by Satyajeet Mukherjee
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
The post ₹36,000 Cr Scam? SEBI Uncovers Jane Street’s Market Manipulation Playbook appeared first on Trade Brains.