📌 At a Glance
Jane Street, the trillion-dollar American quant giant known for brainiac trading, just got slapped with a ₹4,840 crore freeze and banned from Indian markets. Why? SEBI accused them of manipulating BANKNIFTY using expiry-day pump-n-dump stunts. The desi watchdog didn’t blink. Retail traders cheered. And the rest of Dalal Street watched like it was an IPL final.
🎬 1. Introduction – Wall Street Meets Lajpat Nagar
If Warren Buffett is the wise grandpa of value investing, Jane Street is that IIT topper turned grey-hat hacker who reverse-engineered the market and said, “Ab main dikhata hoon kaun boss hai.”
But this time, the algo overlords flew a little too close to the BankNIFTY expiry candle — and got scorched.
🧠 2. WTF Does Jane Street Even Do?
Jane Street is a global proprietary trading firm. They don’t manage your money. They just:
- Trade everything from options to ETFs to commodities.
- Use supercomputers, code (OCaml, bro), and PhDs.
- Employ “market-making” and “stat-arb” to milk inefficiencies.
In 2023 alone, they reportedly made $10.6 billion in profit. Yes, with a “B”.
In India, they entered silently, via Jane Street India Pvt Ltd and a couple of Mauritius-based arms. No press releases. No ribbon cuttings. Just keyboard clacking and some BankNIFTY jujutsu.
💰 3. The Financials – ₹4,840 Crore of Expiry-Day Magic?
Between Jan 2023 and Mar 2025, SEBI says Jane Street:
- Raked in ₹43,289 crore in gross trading gains from index options.
- Of this, ₹4,839.7 crore came from allegedly manipulating expiry-day price movement in BankNIFTY.
- Trades were run by Jane Street India and Jane Street Mauritius together.
This wasn’t your average “buy low, sell high” gig. It was more like:
- 9:15 AM: Load up on Nifty Bank heavyweights.
- 9:30–10:30 AM: Push up index just enough to trigger profits in deep OTM options sold earlier.
- Rest of day: Square off, laugh, repeat.
SEBI’s term? “Non-neutral trading behavior.”
Retail traders’ term? “Bhaiya ye toh setting hai!”
📉 4. Valuation – What’s at Stake?
Jane Street is a private firm but seen as a $20B+ behemoth globally.
But in India:
- Their total funds across accounts were frozen at ₹4,840 crore.
- Trading rights across NSE and BSE suspended for 21 days pending explanation.
- SEBI indicated criminal intent — not just technical breach.
Even if they lawyer up, this sets a precedent: no quant is above the expiry candle.
🍲 5. What’s Cooking – The Real Masala
The trigger? Believe it or not: Jane Street sued another firm (Millennium) in U.S. courts for allegedly stealing its India options strategy.
SEBI went, “Thanks for the tip,” and opened a full forensic probe.
By March 2025:
- NSE flagged suspicious expiry behavior.
- Surveillance logs showed expiry-day trading was being manipulated systematically.
- By July 2025, SEBI dropped the hammer.
And get this: Jane Street ignored a SEBI caution letter sent in February 2025.
Big Brain: Create a billion-dollar expiry hack.
Galaxy Brain: Tell the world someone stole it.
Ultra-Chad Brain: Ignore SEBI warning and keep doing it.
🧾 6. Balance Sheet – Did They Use Their Own Cash?
Jane Street operated mostly proprietary accounts, which is legal.
But:
- Cash trades used to impact index directly.
- Futures and options trades used for “alpha extraction.”
- Multiple Jane Street accounts worked in tandem — not independently.
Which is why SEBI called it: manipulative & deceptive under PFUTP Regulations.
💵 7. Cash Flow – Sab Number Game Hai
SEBI’s forensic data showed:
- Sudden buying spikes on expiry mornings in BankNIFTY stocks (HDFC Bank, ICICI, etc.).
- Aggressive index options writing at levels that would profit if index closed flat or dropped.
- Perfect alignment between index push and options gain.
This wasn’t “random volatility”. This was choreographed expiry theatre.
📊 8. Ratios – Sexy or Stressy?
| Metric | Number |
|---|---|
| Gross Derivatives Gain (Jan ‘23 – Mar ‘25) | ₹43,289 Cr |
| Suspected Expiry-Day Gain | ₹4,840 Cr |
| Frozen by SEBI | 100% |
| Retail Losses? | Probably higher 😭 |
| Legal Defence Ratio | Copium:Premium |
🆚 9. Peer Comparison – Are Other Quants Doing It?
| Firm | India Ops? | SEBI Issues? | Quant Type |
|---|---|---|---|
| Optiver | Yes | None public | Market Maker |
| Tower Research | Yes | Past probe | HFT |
| Hudson River | Not active | No | US-focused |
| Jane Street | Yes | BIG FAT YES | Quant Godmode |
But now, every quant firm in India is sweating. Why?
- SEBI’s message: “expiry-day manipulation = jail time”
- NSE beefing up AI-based trade surveillance
- F&O reforms coming — weekly expiries may get harder to game
🧪 10. Miscellaneous – Shareholding, KMP, Entities
- Indian Entity: Jane Street India Pvt Ltd
- Foreign Arm: Jane Street Mauritius
- MD: Andrew Alan McCormack
- Employees: Ultra-elite IIT/IVY league types
- Promoters: Private, no retail participation
Nothing shady in shareholding. Just shady in expiry trades.
🧑⚖️ 11. EduInvesting Verdict™
Let’s keep it real:
- SEBI did the right thing.
- Jane Street flew too close to the BankNIFTY expiry.
- Retailers were the goats being milked.
- This isn’t about algos vs humans — it’s about fair market structure.
If a ₹6,000 crore gain can be made by moving index 0.5% and dumping later, that’s not strategy. That’s legalised expiry juicing.
India’s regulators just told the world: “We love foreign capital. But not expiry-day cartels.”
📣 Tags
Jane Street, SEBI, expiry day manipulation, quant trading, BankNIFTY, option writing scam, NSE surveillance, market integrity, EduInvesting roast
✍️ Written by Prashant | 📅 July 7, 2025
