An inquiry conducted by India’s regulatory authority, the Securities and Exchange Board of India (SEBI), has focused on 18 specific day-of-expiration sessions. 15 of these sessions were associated with Bank Nifty and the remaining 3 with Nifty 50. US-based Jane Street Group, along with four of its affiliate companies, has been prohibited from any form of participation in the Indian securities markets. The regulator has identified what it describes as systematic manipulation of index rates on the day of expiration.
SEBI’s comprehensive 105-page order reveals that Jane Street Group profited unlawfully, generating ?4,840 crore via aggressive day trading strategies. The target of these strategies was more than 40 stocks comprising Nifty and Bank Nifty. Labelled as ‘Intra-day Index Manipulation’, the strategy largely consisted of heavy stock purchases and sales of futures contracts during morning hours. This strategy crafted false perceptions of market sway.
Jane Street Group skillfully exploited the misleading market momentum which ultimately influenced the index values and options pricing. This crafty move enabled the firm to derive substantial profits from bearish positions on index options that would later skyrocket in value during the day. SEBI’s probe centred around 18 expiration sessions, with the majority linked to Bank Nifty while the rest were associated with Nifty 50.
SEBI discovered that Jane Street adopted a distinct pattern characterized by its ‘sharp, large, and aggressive interventions’. The firm evenly distributed its interventions across the cash, futures, and options markets, focusing majorly on expiration dates, the day when options contracts are usually settled. Multiple stocks were entangled in the case, including some banking powerhouses such as HDFC Bank, ICICI Bank, Axis Bank, and others like SBI, Kotak Mahindra Bank, and PNB.
Other implicated stocks were Nifty constituents, including, but not limited to, Reliance Industries, Infosys, TCS, ITC, L&T, HCL Technologies, and Adani Enterprises. An incriminating instance detailed in SEBI’s order, dated 17 January 2024, associates Jane Street with allegedly making ?735 crore in one day alone. The firm is accused of artificially inflating Bank Nifty stocks during the early trading hours and then abruptly reversing its positions, causing a significant drop in the index.
By engineering a massive fall in the index, Jane Street managed to rake in substantial profits from put options, simultaneously offsetting minor intraday losses incurred in cash and futures markets. As per SEBI’s information, Jane Street persisted with its trading patterns, undeterred by the warning notice it received from SEBI in early 2025. In May 2025, the firm continued its trading patterns, even coming up with a subtly different strategy.
Employing this new method, named ‘Extended Marking the Close’, the firm managed to distort end-of-business-day index levels yet again, thereby extracting sizable profits from options. SEBI established that Jane Street’s artificial pricing signals misled other market participants, causing them to believe the index was either stable or on the path of recovery, while Jane Street was simultaneously preparing for a significant reversal.
Between January 2023 and March 2025, Jane Street accrued ?43,289 crore from index options. During the same period, the firm also offset losses of ?7,687 crore incurred in equity cash and futures markets. It seemed to be a willing trade-off for the firm as the profits gained from options substantially outweighed their losses.
SEBI pointed out that Jane Street persistently ran the largest ‘cash-equivalent’ risks in India’s derivatives market on the expiration days. This dominance in trading volumes and price discovery on critical days fundamentally undermined the fairness and integrity of the market. The regulator’s order incorporates four entities affiliated with Jane Street – JSI Investments Pvt Ltd, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading Ltd.
All of these entities have been instructed to halt any and all debit transactions from their respective bank accounts. This recent incident revives the pressing concern over potential imbalances in India’s derivatives markets. It underscores the lopsided influence of institutional traders, which is a critical aspect requiring immediate review and measures.
SEBI’s report underscored that retail investors often are on the losing side when such large-scale and high-frequency strategies are used to distort expiration-day markets. Such strategies often distort the true market picture and lead to unfair outcomes, causing an inequitable distribution of benefits and losses. The regulators identified this trend, raising concerns and sparking debates about the transparency and fairness of securities markets.