Did Jane Street Manipulate the Indian Stock Market to Gain Rs 43,000 Crore in Options Profits?

Mumbai, July 4 (NationPress) - In a significant case of alleged market manipulation, the US-based trading firm Jane Street is being investigated for purportedly employing advanced strategies to distort Indian stock indices and secure more than Rs 43,000 crore in options profits.

The Securities and Exchange Board of India (SEBI) reported that Jane Street and its affiliates orchestrated a complex intra-day trading scheme aimed at artificially inflating and deflating the Bank Nifty index, particularly on expiry days, to capitalize on substantial options positions.

From January 1, 2023, to March 31, 2025, Jane Street’s entities racked up remarkable profits of Rs 43,289 crore, predominantly through trades involving Bank Nifty options.

This alleged manipulation involved precise actions in both the cash and futures markets, executed with timing and scale that suggested a clear intent to deceive.

SEBI’s findings indicated that the strategy included aggressive procurement of Bank Nifty component stocks and futures early in the trading day, propelling the index upwards.

As the trading day wore on, Jane Street would sell these positions aggressively, driving the index down.

This strategic timing was not coincidental. The trading activity was specifically timed around monthly expiry dates when options contracts are settled based on the index’s final value, enabling Jane Street to reap substantial rewards from the fluctuations they engineered.

SEBI characterized this as a classic example of ‘marking-the-close,’ where traders manipulate underlying index prices just prior to expiry to benefit their derivatives positions.

On expiry days, they executed massive trades; for instance, on January 17, 2024, Jane Street purchased Bank Nifty futures valued at Rs 4,370 crore and sold options worth Rs 32,115 crore in the morning.

By the end of the day, they sold futures amounting to Rs 5,372 crore. Despite facing intra-day losses in the cash and futures segments, their options profit reached Rs 735 crore that day, indicating that the manipulation was designed to benefit one market segment while incurring minor losses in others.

SEBI’s directive noted that Jane Street consistently appeared to be the most significant player in index options risk in the Indian market, especially on expiry days.

The regulator also pointed out that other market participants, unaware of this covert manipulation, were misled by the artificially altered index levels, leading to misguided decisions based on distorted price signals.

Consequently, SEBI has barred Jane Street and its three associated entities—JSI2 Investments Private Ltd, Jane Street Singapore Pte. Ltd., and Jane Street Asia Trading Ltd—from participating in the Indian securities market until further notice.

Their bank accounts are frozen, and they have been ordered to deposit Rs 4,843.5 crore as an initial measure of disgorgement.

Moreover, SEBI has instructed stock exchanges to monitor future activities of these entities closely to prevent recurrence of such manipulative trading practices.

Founded in 2000, Jane Street is a global proprietary trading firm recognized for its substantial involvement in ETF and options trading across the globe.