Explained | How Jane Street’s Trades In Indian Stock Market Led To Rs 4,843 Crore Unlawful Gains | Business News

Last Updated:July 10, 2025, 14:58 IST

Jane Street, a secretive American trading firm, allegedly made Rs 4,843 crore in one day from the Indian stock market using high-frequency trading

Jane Street used high-frequency trading to manipulate Bank Nifty options.

While many Indians labor for a modest daily wage of Rs 400, a lesser-known US trading firm reportedly shocked the financial community by allegedly earning a massive Rs 4,843 crore through suspected manipulative practices in the Indian capital markets.

The firm in question, Jane Street, is no ordinary Wall Street outfit. Headquartered in New York, Jane Street is among the world’s most powerful and secretive proprietary trading firms. It doesn’t handle public investments like traditional brokerages. Instead, it trades using its own money, executing lightning-fast, high-frequency strategies that involve thousands of trades every second, all driven by code, not instinct.

Until recently, Jane Street was largely an unknown name in India’s public investing space. But that changed rapidly when its alleged operations in the Indian derivatives market, specifically involving Bank Nifty options, sparked alarm bells at SEBI, the capital markets regulator.

The profit centres around a strategy that unfolded week after week during Bank Nifty’s Thursday expiries, when positions in options contracts must be settled. According to sources close to the investigation, Jane Street would begin Thursday mornings by quietly purchasing shares of heavyweight banking stocks such as HDFC Bank and ICICI Bank. These moves would cause a slight upward nudge in the Bank Nifty index.

With the index rising, the firm would then buy large volumes of put options, contracts that profit when the market falls. And then, just before 3:30 PM, Jane Street would allegedly dump those same shares, triggering a sharp fall in the Bank Nifty. The end result: a massive profit on the options it had strategically picked up earlier in the day.

In its order, the regulator has listed out the gains made and the strategies employed by Jane Street to make those gains.

• These activities are dated between August 2023 to May 2025. Here’s a look at those activities: Jane Street employed an intra-day index manipulation strategy on August 31, September 13, September 20 and September 28, 2023, making gains worth Rs 191 crore, Rs 212 crore, Rs 233 crore and Rs 241 crore, respectively.
• On October 4, 2023, Jane Street made unlawful gains to the tune of Rs 163 crore by extending the close. Marking the close is a market abuse practice that involves manipulating the closing price of a security or financial asset to make a profit and avoid a loss.
• The intra-day index manipulation strategy was again employed by Jane Street on October 18, October 26, and December 6, 2023, along with January 3, January 17, March 6 and April 16, 2024, which resulted in gains worth Rs 317 crore, Rs 259 crore, Rs 150 crore, Rs 164 crore, Rs 734 crore, Rs 197 crore and Rs 170 crore respectively.
• Jane Street employed the extended marking the close tactic on May 8, 2024, which resulted in unlawful gains worth Rs 171 crore. Between May 15 and July 3, 2024, the intra-day index manipulation strategy was used by Jane Street, leading to unlawful gains worth Rs 1,040 crore.
• On July 10, the extended market close tactic led to unlawful gains worth Rs 225 crore for Jane Street and its entities. All of these trades highlighted above were carried out on the Nifty Bank.
• In addition to this, Jane Street also employed the extended marking the close strategy on the Nifty 50 index, which resulted in unlawful gains worth Rs 370 crore.

“As recently as May 2025, the JS Group again resorted to undertaking prima facie manipulative “extended marking the close” trading patterns of large and aggressive intervention in index and constituent markets towards the expiry day closing, so as to influence and manipulate the index to their illegal advantage. The impugned trade in May 2025 are a cynical violation of the caution letter issued to the JS Group in February and of their own declarations made to the NSE in the same month,” the SEBI orders stated.

This up-and-down manipulation allegedly allowed Jane Street to move the market with its own trades, earning crores, without ever showing up on a TV screen or giving a stock tip on a WhatsApp group.

For weeks, SEBI had been tracking a pattern of sudden last-minute jolts in Bank Nifty’s price movement every Thursday. The regularity of this pattern, and the consistent beneficiary, finally led SEBI to open a formal investigation.

When SEBI pieced together the puzzle, it concluded that Jane Street was manipulating the market, shifting its direction artificially for its own gain. The fallout was swift. The firm’s Rs 4,843 crore in profits were frozen, and on July 3 Jane Street was barred from trading in the Indian stock market.

The episode has reignited a deep concern among retail investors. While a small-town trader in Surat or Bhopal cautiously puts Rs 5,000 into the markets hoping for a modest gain, institutions like Jane Street move crores with machine-like precision, turning the market itself into a tool for profit.

This isn’t about emotion, luck, or gut instinct. It’s about algorithms, data, infrastructure, and, above all, speed. Every move is pre-programmed, every trade calculated to the microsecond. In such a system, the average investor is not playing the same game, they’re barely on the same board.

Jane Street’s alleged operation raises uncomfortable but important questions about the integrity of the Indian markets and whether true price discovery is possible when entities with such technological superiority can move the markets at will.

More importantly, it’s a wake-up call for India’s regulatory architecture. As high-frequency and algorithmic trading becomes more widespread, SEBI faces the challenge of balancing innovation with fairness, ensuring that the stock market remains a place where ordinary investors aren’t just pawns in a high-stakes global game.

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