Jane Street Group, the US buying and selling powerhouse that was slapped with a buying and selling ban in Indian markets on Friday, made a whopping Rs 735 crore single-day profit throughout a January 2024 buying and selling session, based on a SEBI order printed that day.The substantial earnings have been half of Jane Street’s complete earnings of Rs 36,502.12 crore throughout varied market segments in India from January 2023 to March 2025. SEBI’s detailed investigation particularly highlights January 17, 2024, when the organisation allegedly carried out a subtle “Intra-day Index Manipulation” scheme involving the Bank Nifty index and its parts, ensuing in vital good points from index choices, based on an ET report.
What did Jane Street do to make Rs 735 crore single-day profit?
- On January 17, 2024, the Bank Nifty index commenced buying and selling significantly decrease at 46,573.95, down from its earlier closing worth of 48,125.10. “Media reports claimed that this fall may be attributed to the market’s apparent disappointment with the results announced by HDFC Bank after market close on January 16, 2024,” SEBI famous.
- The regulatory physique recognized a dual-phase strategy that enabled Jane Street to build up a web profit of Rs 734.93 crore inside a number of hours of buying and selling.
- During the preliminary buying and selling interval—”Patch I”—the organisation allegedly bought Bank Nifty constituent shares and futures valued at Rs 4,370 crore, which SEBI famous was appreciable relative to typical market buying and selling volumes. These acquisitions resulted in worth will increase, inflicting market individuals to incorrectly interpret it as a market restoration.
- “At a time when participants in index options markets are misled by the above support for Nifty Bank, JS Group builds effectively Rs 32,114.96 crores of bearish positions in the much more liquid Nifty Bank index options by buying cheap Put options and selling expensive Call options,” the order stated.
- During the next part—”Patch II”—Jane Street disposed of virtually all its long-term holdings. “The sales are aggressive, in a manner that pushes down prices in the component stocks and hence the index. JS Group books losses in intraday cash/ futures market trading,” the SEBI order alleged.
- The earnings generated from index choices considerably outweighed the fairness losses. When the Bank Nifty index declined from its morning peak, put choices elevated considerably in worth while name choices decreased. “Profits in index options more than compensate for the JS Group’s losses in intraday cash/futures trading,” SEBI stated.
Jane Street ‘Manipulation’ Pattern
Jane Street employed equivalent “Intra-day Index Manipulation” ways throughout 15 out of 18 days below SEBI’s scrutiny. For the remaining three cases, they carried out an “Extended Marking the Close” strategy, which continued for 3 further days in May 2025, even after receiving SEBI’s warning discover.Also Read | Jane Street ban: Why has SEBI barred US-based buying and selling agency, which made multi-thousand crore profit, from India’s securities markets? ExplainedFollowing a National Stock Exchange advisory in February 2025, the “JS Group persisted with similar trading activities, disregarding both the Exchange’s cautionary communication and their own pledges,” as said by the regulatory authority.While the NSE concluded its investigation, SEBI took stringent measures. The regulator issued orders on Friday prohibiting Jane Street and 4 associated entities from taking part in Indian securities buying and selling, while directing banks to limit their account withdrawals. Additionally, SEBI initiated proceedings to grab Rs 4,840 crore in purported illegal earnings.The investigation highlights worrying elements about India’s derivatives market construction, the place international entities utilising subtle algorithms and high-speed buying and selling strategies compete in opposition to particular person retail choices traders. SEBI’s investigation revealed Jane Street’s dominant place, noting they “consistently running what appeared to be by far the largest risks in ‘cash equivalent’ terms in F&O particularly on index option expiry days.“The regulatory physique emphasised the substantial magnitude of Jane Street’s market actions in money and futures segments. They noticed that the agency understood that Nifty Bank would doubtless decline by day’s finish, contemplating their deliberate strategy to aggressively liquidate their morning acquisitions and past.SEBI identified that different market individuals remained uninformed about these developments, main them to have interaction in transactions while the Nifty Bank index was being artificially sustained at elevated ranges quickly.