How has ban on US firm Jane Street impacted markets?
SEBI recently banned Jane Street, a major US trading firm, and it's made waves in India's stock markets.
In just two weeks, index options trading on the NSE dropped by 36%, with similar slowdowns seen on the BSE.
Options trading has become less appealing
Options are a big deal for managing risk and hedging bets in Indian finance.
With Jane Street gone, markets have become thinner and less active—meaning fewer trades and possibly leading to higher costs for everyone involved.
The drop also lines up with a dip in market volatility this July, making options trading even less appealing right now.
Jane Street's exit has left a noticeable gap
Jane Street was a huge player in these trades, so their exit left a noticeable gap: six out of 10 sessions since the ban saw lower turnover at both major exchanges.
The combination of their absence and calmer markets has really cooled off trading activity lately.