Jane Street made ₹43,289 CRORES from Index Options in ~2 yrs by manipulating markets
And retail investors lost ₹1.31 LAKH CRORES in F&O from FY22-24
I read the 105-page SEBI order so you don't have to
Simplified for you to understand how they pumped & dumped the INDEX🧵👇
And retail investors lost ₹1.31 LAKH CRORES in F&O from FY22-24
I read the 105-page SEBI order so you don't have to
Simplified for you to understand how they pumped & dumped the INDEX🧵👇
[1] About Jane Street
It is a New York-based quant-trading firm that operates in India through a web of entities.
In SEBI's interim order, they've been accused of manipulating markets and profiting, worth ₹36,502 crores, largely at the expense of retail investors.
It is a New York-based quant-trading firm that operates in India through a web of entities.
In SEBI's interim order, they've been accused of manipulating markets and profiting, worth ₹36,502 crores, largely at the expense of retail investors.
[2] Understanding markets in India
Crores of retail investors from remotest of towns try their luck in F&O
So much that if cash segment traded value of Bank Nifty Index shares is "X" Cr.
The relative size of BANK NIFTY options cash equivalent traded is "353 X" Cr.
Crores of retail investors from remotest of towns try their luck in F&O
So much that if cash segment traded value of Bank Nifty Index shares is "X" Cr.
The relative size of BANK NIFTY options cash equivalent traded is "353 X" Cr.
[3] Why do people dabble in F&O?
If you think stock X will rise from ₹100 to ₹110, here's how much you need to invest while buying stock:
a) In cash: ₹100
b) In futures*: ₹20
b) Using call option*: ₹1
*Over-simplified. Capital in F&O may require more investment at times
If you think stock X will rise from ₹100 to ₹110, here's how much you need to invest while buying stock:
a) In cash: ₹100
b) In futures*: ₹20
b) Using call option*: ₹1
*Over-simplified. Capital in F&O may require more investment at times
The payoff may be the same in all cases if stock X rises from ₹100 to ₹110 in a quick time.
People want to get rich quick. So with whatever little capital they have, they prefer dabbling in F&O.
People want to get rich quick. So with whatever little capital they have, they prefer dabbling in F&O.
[4] Manipulation method
A trader with huge cash can buy/sell stocks and build opposite positions in derivatives
After pumping shares, a trader can buy puts (downside bets) when they get cheap
And then dump shares in cash & profit from puts
Jane Street did this at scale👇
A trader with huge cash can buy/sell stocks and build opposite positions in derivatives
After pumping shares, a trader can buy puts (downside bets) when they get cheap
And then dump shares in cash & profit from puts
Jane Street did this at scale👇
[5] Strategy called "Intra Day Index Manipulation Strategy"
January 17, 2024:
It is one of those days when Jane Street made ₹734.93 crores of profits across BANK NIFTY options.
Here's how they did this👇
January 17, 2024:
It is one of those days when Jane Street made ₹734.93 crores of profits across BANK NIFTY options.
Here's how they did this👇
[6] Phase 1
Jane Street had massive cash to manipulate stock values.
They bought BANK NIFTY constituent shares worth ₹1,852 crores within ~2 hrs of mkt opening.
As much as 25% of all value of a company's shares (INDUSINDBK) bought during this time was by them.
Jane Street had massive cash to manipulate stock values.
They bought BANK NIFTY constituent shares worth ₹1,852 crores within ~2 hrs of mkt opening.
As much as 25% of all value of a company's shares (INDUSINDBK) bought during this time was by them.
Similar pattern was observed in the futures market, where they purchased long positions on all BANK NIFTY index constituent shares.
They bought as much as 37.93% of HDFC Bank’s all future-long value quantity purchased during this period.
They bought as much as 37.93% of HDFC Bank’s all future-long value quantity purchased during this period.
They were the biggest buyers of these stocks during that time.
By a BIG MARGIN!
By a BIG MARGIN!
[7] Phase 2: Buying very large short positions through index options
As share prices rise, calls become expensive and puts cheaper.
The group bought puts and wrote calls to build huge short positions worth ₹8,751 crores, i.e., 15x cash position in cash & futures.
As share prices rise, calls become expensive and puts cheaper.
The group bought puts and wrote calls to build huge short positions worth ₹8,751 crores, i.e., 15x cash position in cash & futures.
[8] Phase 3: Dumping in shares in the afternoon
The dumping quantities as a percentage of total market SELL quantities were also very high.
Values were as high as 25%. Just like buying value volumes.
The dumping quantities as a percentage of total market SELL quantities were also very high.
Values were as high as 25%. Just like buying value volumes.
The stock prices and thus the Bank NIFTY Index, plummeted enough to make Jane Street Group huge profits.
They made a net profit of ₹673.33 crores IN A SINGLE DAY!
They made a net profit of ₹673.33 crores IN A SINGLE DAY!
[9] “Extended Marking The Close” Strategy
In this strategy, Jane Street Group did nothing during the day.
But closer to market closing, they aggressively sold/bought index constituent shares in huge quantities.
In this strategy, Jane Street Group did nothing during the day.
But closer to market closing, they aggressively sold/bought index constituent shares in huge quantities.
On July 25th, 2024, an expiry day, they sold aggressively.
In 3 days, they made ₹560 crores from index options using this strategy.
In 3 days, they made ₹560 crores from index options using this strategy.
[10] Thick-skinned
Even after receiving notices from NSE and agreeing to comply with not deploying such manipulative methods, Jane Street continued such tactics.
They last deployed similar strategies as recently as May 15th, 2025.
Even after receiving notices from NSE and agreeing to comply with not deploying such manipulative methods, Jane Street continued such tactics.
They last deployed similar strategies as recently as May 15th, 2025.
[11] SEBI Order
While SEBI has tested only for 21 trading days with maximum profits. For those days, they’ve ordered impounding of ₹4,843.58 crores.
Investigation of more days may lead to more impounding. However, what if Jane Street remits back all its assets from India?
While SEBI has tested only for 21 trading days with maximum profits. For those days, they’ve ordered impounding of ₹4,843.58 crores.
Investigation of more days may lead to more impounding. However, what if Jane Street remits back all its assets from India?
Definitely a great move in making markets more efficient.
From FY22-24, individual traders lost ₹1,31,904 crores (gross) in the F&O segment.
Jane Street, through its manipulation, did play a big role.
Kudos to Mr. Ananth Narayan G. sir, a WTM of SEBi for passing this order.
From FY22-24, individual traders lost ₹1,31,904 crores (gross) in the F&O segment.
Jane Street, through its manipulation, did play a big role.
Kudos to Mr. Ananth Narayan G. sir, a WTM of SEBi for passing this order.
I've been strongly voicing my opinion against F&O and how the system is not in favour of the retail traders making a profit.
Not just through market manipulation but otherwise also.
This won't be just limited to Jane Steet. @flyingbird308 yesterday highlighted this.
Not just through market manipulation but otherwise also.
This won't be just limited to Jane Steet. @flyingbird308 yesterday highlighted this.
Like the content?
Follow me (@BahlKanan) for more on personal finance and investing.
I pulled off an all-nighter to read the order and prepare this content for you.
Kindly retweet the first tweet so that people know what happened:
Follow me (@BahlKanan) for more on personal finance and investing.
I pulled off an all-nighter to read the order and prepare this content for you.
Kindly retweet the first tweet so that people know what happened:
https://x.com/BahlKanan/status/1941364817232789828
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