Mumbai, 4 July (IANS). Jane Street has been accused by the Securities and Exchange Board of India (SEBI) that it has made a profit of more than Rs 43,000 crore in index options using wrong strategies against the rules.
It is considered to be the biggest rigging case in the Indian stock market in recent years. Let’s know how Jane Street made a strong profit through this harefari.
According to the Securities and Exchange Board of India (SEBI), Jane Street and its respective institutions formulated an intra-day trading strategy to increase and reduce the bank Nifty index in an artificial manner.
The market regulator found that between January 1, 2023 and 31 March 2025, Jane Street and its institutions made a shocking profit of Rs 43,289 crore, which was mainly from the Bank Nifty option.
This profit was achieved by manipulating prices in cash and future markets.
According to SEBI, this strategy was purchased in the shares and futures included in the bank Nifty during the morning trading hours, causing the index to climb.
As the day proceeded, Jane Street aggressively sold the same positions, leading the index to go down.
SEBI said in the order that its timing was not random. These trade were deliberately conducted around monthly end dates, when the option contracts are settled based on the closing price of the index, giving Jane Street to the swing made on a large scale.
The regulator described it as a classic case of ‘Marking-The-Close’, where a trader manipulates the prices of the underlying index in favor of its own derivative position just before the end of the end.
Only on the day of expiration, they enter the market with massive trade.
In the order of SEBI, the morning of January 17, 2024, Jane Street made an aggressive purchase of Rs 4,370 crore in Bank Nifty Futures and sold bank Nifty options worth Rs 32,115 crore. After noon, it sells a large amount of large quantity of Rs 5,372 crore in Bank Nifty Futures.
This led to a maximum short position of Rs 46,620 crore in the bank Nifty Index Options segment and softened in the bank Nifty.
Jane Street made a profit of Rs 735 crore in the option segment, while the foreign firm received an intraday deficit of only Rs 61.6 crore in cash and futures during this period.
Thus, Jane Street made a clear profit of Rs 673.4 crore in a single day.
SEBI’s order highlighted that Jane Street was continuously running the largest index option risk in the Indian market.
The regulator further stated that other market participants were unaware of this manipulation. They were misled by incorrectly increased or reduced index levels and started making decisions based on wrong prices.
SEBI has stopped Jane Street and its three related institutions – JSI 2 Investment Private Limited, Jen Street Singapore PTE Limited and Jane Street Asia Trading Limited from reaching the Indian Securities Market till the next notice.
Their bank accounts have been freezed and they have currently been instructed to deposit Rs 4,843.5 crore.
SEBI has instructed stock exchanges to closely monitor the future activities by these institutions to ensure that they do not repeat such rigging using similar trading patterns.
Gen Street is a global -owned trading firm established in 2000, known worldwide for its deep participation in ETF and option trading.
-IANS
SKT/ABS