How Jane Street manipulated India's markets and made millions
What's the story
The Securities and Exchange Board of India (SEBI) has barred US-based trading firm Jane Street and its affiliates from accessing the market. The ban comes amid an ongoing investigation into alleged market manipulation by the company through its derivatives trading. The regulator has also ordered Jane Street and its affiliates to deposit illegal gains worth ₹4,843.5 crore in a SEBI-designated account. But how did this US trading firm tilt the Indian markets and rake in massive profits?
Allegations
Manipulation of Bank Nifty
SEBI has accused Jane Street of manipulating the closing of the Bank Nifty index on expiry days. The regulator claims that on 14 expiry days, the firm heavily bought Bank Nifty futures and sold options in large quantities during the morning. After noon, Jane Street related entities aggressively sold large amounts in Bank Nifty futures to influence index closing. The firm created artificial price movements to benefit its pre-established positions.
Example
SEBI details Jane Street's modus operandi
On January 17, 2024, Jane Street is reported to have purchased Bank Nifty futures worth ₹4,370 crore and sold options worth ₹32,115 crore during the morning session. Later that day, it offloaded an additional ₹5,372 crore in futures, creating a peak short position of ₹46,620 crore in the options segment. The firm allegedly earned ₹735 crore in options profits while incurring a ₹61.6 crore loss in futures and cash, resulting in a net gain of ₹673.4 crore.
Findings
Heavy trading across various market segments
SEBI found that between January 2023 and March 2025, Jane Street traded heavily across various market segments. The group made ₹43,289 crore from index options trading, which constituted a major chunk of their profits. However, these were offset by total losses of ₹7,687 crore in stock futures, index futures, and the cash market.
Response
Undertaking suspicious trading activities
SEBI noted that the Jane Street continued suspicious trading activities, particularly near market closing on expiry day. The regulator said these were not normal trades but manipulation against SEBI's prohibition of fraudulent and unfair trade practices. Despite warnings in February 2025 and promises made to NSE, the group continued such practices.
Decision
SEBI's order in detail
In light of these violations, SEBI has ordered the impounding of ₹4,843.5 crore in unlawful gains earned by the firm from alleged violations. The entities have been barred from accessing the securities market and are also prohibited from buying, selling, or dealing in securities directly or indirectly. Banks where these entities hold accounts have been directed not to allow any debits without SEBI's permission, except for complying with this order.