How Jane Street gamed Bank Nifty on expiries, made Rs 36,500 crore

New Indian Express

4 days ago

According to the Sebi findings, Jane Street used to heavily buy Bank Nifty futures as well in the cash segment and sell Bank Nifty options in big numbers--all in the morning of the expiry days. By the afternoon of the same day, its related entities used to aggressively sell large quantities of Bank Nifty futures and pocket hefty profit.
According to Sebi calculation, JS and three of its associated entities made a whopping Rs 36,671 crore in profits between January 2023 and May 2025. Of the total gain, Sebi considers as much as $566.3 million or Rs 4,843.5 crore of illegal gains.
The group's total illegal profits identified across 15 days in May 2025 was Rs 4,843 crore. Between January 2023 and March 2025, JS made Rs 44,358 crore in options, lost just Rs 7,208 crore in stock futures, lost Rs 191 crore in index futures and Rs 288 crore in cash. Overall its net profit stood at Rs 36,671 crore.
What JS Group used to do was on the expiry days, it aggressively bought large amounts in Bank Nifty underlying stocks/futures (to the tune of Rs 4,370 crore on Jan 17, 2024 and sold this index options Rs 32,115 crore. By afternoon it aggressively sold large underlying stocks/futures worth Rs 5,372 crore. Peak short position in the index options segment was Rs 46,620 crores. Thus it made a clean profit of Rs 735 crore from index options, while its intraday loss from cash/futures was only Rs 61.6 crore.
Narayan stated the US trading firm's 'four entities are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly.'
Sebi also noted that 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 in May 2025, despite a caution letter in February and its own declarations to the NSE.
"Such egregious behaviour, in clear disregard/defiance of the explicit advisory issued to them by the NSE in February 2025, amply demonstrates that unlike the vast majority of foreign portfolio investors and other market participants, JS Group is not a good faith actor that can be, or deserves to be, trusted.
"In the face of such a strong prima facie case that allowing the JS Group to continue as before may severely compromise investor protection on an extraordinary scale, Sebi has a duty to directly intervene," Narayan said in the order.