Profit in NY, loss in UP—what Jane Street ‘market manipulation' did to Tier 2 & 3 India

The Print

2 days ago

Before he jumped into trading, Ritesh, now 52, used to get frequent calls from unknown numbers asking, 'Do you want to become a crorepati?'
He was part of a small Tier 2 and Tier 3 army of F&O traders whose wealth was vacuumed when Jane Street made big money through alleged market manipulation. India's retail trading rush in recent years has pulled in many people without much market knowledge or exposure.
Lucknow: Ritesh spent the past five years Googling stock trading and taking lessons off YouTube in his tiny bedroom in Lucknow's Jankipuram. At 47, he was learning an all-new subject. From 9.30 am daily, he would be on his daughter's six-year-old laptop, punching away at the keyboard, trading aggressively in Nifty and Bank Nifty futures and options. In June last year, he traded around Rs 5 lakh. He didn't make a rupee in profit.
It was a very different life from his previous one. For 35 years, he sat behind a wooden counter at his readymade garment shop in Lucknow's busy Aminabad market, sandwiched between paan and samosa shops. The shop shut down during the Covid pandemic, and he turned to quick-buck pursuits.
'The money was part of my savings, for my daughter's wedding and education, and now I'm afraid I might have to sell my house,' said a visibly tired Ritesh, wearing a striped cotton T-shirt and running a hand over his receding hairline. He kept glancing at his phone for updates on an order from the new bakery business he has started with his wife.
While Ritesh was making his trades in Lucknow, halfway across the world a New York-based firm, Jane Street, was allegedly moving the same markets. Its 'high frequency' strategies, SEBI has said, helped it amass Rs 36,502 crore in profits, purportedly through 'egregious manipulative practices'. Small traders like Ritesh, who had little stock market knowledge and relied on social media tips, suffered. He became part of the 93 per cent of retail F&O traders who lost money between FY22 and FY24, according to an earlier SEBI report.
The data shows that about 90 per cent of F&O traders lose money, often because of market illiteracy. More than 75 per cent of loss-makers kept trading even after losing money for two consecutive years. With gambling banned in India, F&O has become a proxy for many.
'Retail traders from smaller cities have been at a disadvantage. Jane Street's alleged manipulation only deepened their losses, quite dramatically,' said Mayank Bansal, a United Arab Emirates-based hedge fund manager who first flagged the expiry-day manipulations.
He first noticed the disruption of the F&O market in July 2023 and by January of the next year, his suspicions about Jane Street's apparent manipulation crystallised.
'I was clear that this wasn't random volatility. It was deliberate,' he added.
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'FOMO', finfluencers, and bad F&O bets
Ritesh, who wants to reveal only his first name, recalled that when he began trading, he followed at least 15 social media influencers but tracked only five on YouTube. He found them by using the keywords 'best trading accounts to follow'. Sometimes logic mattered, and sometimes brand value.
After mass-following several YouTubers, he now sticks to Nitish Kumar or 'NK Stock Talk', an avuncular content creator who shares stock market tips from a swanky office. His videos have titles such as 'How to Make Career in Stock Market' and 'How to Do – Trading Plan and Psychology'.
By June 2024 Ritesh was convinced he had cracked the formula for Nifty, which tracks 50 large companies across sectors, and Bank Nifty, which includes the biggest banks.
Sitting in his Janakipuram residence, he bought 10 Bank Nifty stocks, assuming if the stocks went up, the index would rise too. As the index rose, he sold index call options, expecting a profit, but the market went against him. The put options became cheaper. He traded Rs 2-3 lakh in index options — calls and puts on Nifty and Bank Nifty.
These groups are fake, the screenshots are fake, they're edited, and they're just selling a dream — a dream worth crores
-Sunil Kumar, farmer, tutor, and trader from Rewa
From Lucknow in Uttar Pradesh to Bhilwara in Rajasthan and Jalgaon in Maharashtra, the story of retail traders was the same. Different people, multiple losses.
In a village in Bhilwara, where firewood is still used in most households and only a few have LPG cylinders, VS, a 27-year-old B.Tech graduate, was all set to launch his career with a tech startup in 2020 when the pandemic struck. His offer slipped through. There was no job in sight, his father's cloth shop shut down, and family savings dipped to barely Rs 30,000.
Farming is the main livelihood in his village, with the younger generation leaving for technical and non-technical jobs in cities like Surat, Rajkot and Indore. With few options at home, VS turned to trading.
VS knew nothing about F&O trades. On X, while doomscrolling, he saw Adani stocks start to fall and people boasting about the money they had made.
'It started with a YouTube search after the Hindenburg-Adani report came out in 2023. That is when the chatter over Jane Street's high frequency trade and promises of big gains made headlines,' VS said. LinkedIn was also full of posts about Jane Street's new hires — top IIT graduates with salaries worth crores.
Then there were stock market YouTubers. VS was partial to Abhishek Kar, known for data-heavy videos with rapid-fire analysis, bold predictions and technical jargon. The videos he watched had punchy and flashy thumbnails, often featuring photos of Mukesh Ambani, Harshad Mehta, or well-known politicians. Podcasts are even more popular than content-heavy videos, with views going up to more than a lakh.
Soon, VS stayed glued to his laptop from 9.30 am to 3.30 pm, watching the red and green candles flicker on his screen. At first, it was thrilling.
'It was like a gamble, but it was just an illusion,' he said. In total, VS traded with at least Rs 15 lakh. No profits were made.
Most of the trades VS did were out of 'FOMO' (fear of missing out), he said. 'I was tense. I felt, if somebody can make so much money, why can't I?' Out of Rs 15 lakh, he lost Rs 13 lakh for that reason.
VS' parents are conservative, and he never told them about the loss. His father had never tried the stock market.
'If they get to know, they won't be able to cope with the loss,' he said, lapsing briefly into a sombre silence. 'They'll think I don't want to work hard, and I'm looking for quick ways to earn money. I will feel small.' He has only confided in his brother, who has been supportive despite the losses.
Still struggling to find a job and wanting to keep his mind occupied, VS has joined a boutique firm in the area as a freelance salesperson. He earns Rs 14,000 a month.
'Frankly, I don't expect to recover my losses in the near future, because it was my past and it's gone. This job keeps me engaged,' he said.
Around 600 km away, in Maharashtra's Jalgaon, India's banana city, Sunil, 50, sat behind the counter of his fertiliser shop in Adarsh Nagar, with stacks of urea and compost taking up most of the space. Unlike VS, Sunil had been passively investing in the stock market for over two decades to secure a future for his children and to cover his wife's medical expenses.
I was tense. I felt, if somebody can make so much money, why can't I?
-VS, Bhilwara resident who lost Rs 13 lakh in trading
In March 2024, Sunil was impressed by several trading influencers, which led him to Bank Nifty options. It was new for him. He invested Rs 8 lakh.
'I made Rs 1.5 lakh profit, and then a little more, and it looked easy. But then the market flipped, and I exited with only Rs 20,000 in hand,' Sunil said.
At first, Sunil struggled to cope. He did not talk about the loss to his ailing wife and mother. 'The point was, I'll make some profit for them, and I couldn't,' he said. 'It'll be difficult to explain.'
But he has not exited the game. Instead, he's been 'extra cautious.' He now trades with Rs 30,000–50,000. 'The market moves too fast, and I can't risk everything,' he said.
The same SEBI study cited earlier indicates that the net losses of individual traders widened by 41 per cent to Rs 1,05,603 crore in FY25 from Rs 74,812 crore in FY24.
Tip bazaars and fake profits
In Rewa, Madhya Pradesh, the stock market isn't a common topic. But when Sunil Kumar bought a new smartphone, he saw an avenue to be more financially responsible. A farmer and part-time tuition teacher, he saved Rs 50,000 to try trading.
'I watched YouTube videos, it made me curious. I knew the market doesn't guarantee anything, so in case I lose money, I can go back to farming,' he said.
In his town, most people talk about either investing in gold, land or LIC policies. Now, though, investment advice also trickles in from agents and online influencers. Telegram and YouTube channels promise big gains, backed by screenshots of instant profits.
Kumar signed up for everything. He joined Telegram and Facebook groups claiming to offer free stock tips. The chats are chaotic, like an Indian bazaar. Rocket, red siren, and fire emojis announce every promise, most of it in all caps: 'Trade Alert,' 'Target Hit,' 'Mota Paisa Banega' (You'll make big money). The admins, faceless but assertive, post screenshots of traders' profits to create an impression of 'authenticity,' but never the losses.
Mixed in are sponsored ads for one-week or one-month stock trading courses. Some promise 'lifetime membership,' others 100% accuracy. The visuals are formulaic but efficient: a green raging bull, men in corporate attire with green candles shooting skywards in the background. Templates featuring Elon Musk or the New York Stock Exchange pop up repeatedly. Groups like 'Banknifty Share Market Traders,' 'Futures and Options Traders,' and 'Stock Market Trading Tips' flood phones with insistent messages.
'These groups are fake, the screenshots are fake, they're edited, and they're just selling a dream — a dream worth crores,' Kumar said. Ritesh, too, had seen these screenshots. He too had believed in similar screenshot dreams.
For traders like Ritesh, VS and Sunil, entry into the market is easy. Everyone knows someone who claims to have made lakhs trading. Dozens of unknown numbers, from across India call to ask 'if you're looking to learn stock market trading'. Risk is rarely discussed. Words like 'hedging' or 'volatility' are tossed around, but with little context, they sound more exciting than foreboding.
Jane Street market storm
Not many people in India had even heard of Jane Street until the scandal broke.
Most small traders didn't read the 109 pages of SEBI's 3 July interim order against it, or even learn about it in pink papers or business news channels. Instead, they were alerted by YouTube and Instagram reels with titles such as Jane Street dhokebaz (Jane Street cheat) and SEBI ne zapt kie 4800 crore (SEBI seized Rs 4,800 crore) flashing in bold fonts, cut with stock footage of tumbling share prices.
Jane Street stands accused of manipulating the Indian market for huge profits. The alleged strategy was to buy up Bank Nifty stocks in the morning and then sell them off aggressively by afternoon. This ended up in a situation where the stock prices would fall sharply. Even if Jane Street lost money on those trades, they had another way to profit. They placed big bets — short positions in index options — that paid out when the market dropped. Between January 2023 and March 2025, Jane Street Group made total trading profits of Rs 36,502 crore, according to SEBI's probe. The regulator alleged that Rs 4,843 crore of this amounted to 'unlawful gains'.
Now SEBI and the Finance Ministry are discussing ways to rein in F&O trading, and to strengthen the cash market. Another step they've taken is to limit weekly options expiry to just one per week. It helped bring back sanity
-Krishna Appala, fund manager at Capitalmind PMS
SEBI was watching as Jane Street's so-called 'secret strategy' became part of US court hearings and media investigations. The secret strategy had India written all over it. The F&O segment was booming here, and Jane Street sniffed an opportunity in the surge in trading volumes to sway the Indian markets and rake in millions. SEBI temporarily banned the firm from trading in India and ordered it to place the alleged unlawful gains into an escrow account. The ban was lifted on 21 July, and Jane Street—which has denied the allegations— has vowed not to do any more F&O trading in India until the matter is resolved with SEBI.
The Jane Street fracas came in a market awash with new traders.
From 31 March 2021 to 30 November 2024, the number of DEMAT accounts in India increased from 3.3 crore to 14.3 crore, a fourfold rise. Post-Covid, retail participation had surged as more and more people sought to make 'easy' money from home.
'A lot of new and inexperienced people entered the market. The growth has been unregulated,' said Krishna Appala, fund manager at Capitalmind PMS. He added that the market has somewhat stabilised after the chaos noted last year.
Back when the alleged manipulations were taking place, the market began to feel rigged, said traders who spoke to ThePrint. Ritesh and others couldn't explain how, but it seemed as if someone always knew what was coming.
SEBI's interim order put some of those suspicions into writing.
'What is, however, unacceptable and illegal, is the use of egregious manipulative practices to create opportunities to manipulate markets, influence and manipulate indices, and artificially profiteer from such moves with their large trading and risk positions in index options markets,' it noted.
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A fresh start?
The Jane Street case has become part of a bigger political hotbutton over how the market is stacked in favour of the heavyweights.
Congress leader Rahul Gandhi posted on X that he had warned in 2024 that the F&O market had become a playground for 'big players' while draining small investors' pockets.
'Now SEBI itself is admitting that Jane Street manipulated thousands of crores. Why did SEBI remain silent for so long? At whose behest was the Modi government sitting with its eyes closed?' he asked.
मैंने 2024 में साफ कहा था – F&O बाज़ार 'बड़े खिलाड़ियों' का खेल बन चुका है, और छोटे निवेशकों की जेब लगातार कट रही है।
अब SEBI खुद मान रहा है कि Jane Street ने हज़ारों करोड़ की manipulation की।
SEBI इतने समय तक चुप क्यों रही?
मोदी सरकार किसके इशारे पर आंखें मूंदे बैठी थी?
और… https://t.co/JTvqWvyw6z
— Rahul Gandhi (@RahulGandhi) July 7, 2025
Last week, the Income Tax department surveyed certain broking firms in what it called a tax evasion probe. SEBI chairperson Tuhin Kanta Pandey defended the regulator's role, stating that agencies work within their own mandates.
'The information is largely in the public domain… What SEBI had to do at the interim stage, has been done,' Pandey told media persons.
Some market watchers, however, say the response was too little too late and that SEBI needs to set an example.
'If SEBI's interim order holds fort, the punishment ought to be decisive, exemplary, and unforgiving,' said Bansal. 'But the delayed response allowed the damage to spread. You took 1.5 years to act… while the interim order was appropriate, the final order should be harsher. The market is thriving, we just removed the thieves.'
I lost money, but I have clarity now. I know who makes profit, and it's not small traders like me
Ritesh, business owner and former F&O trader from Lucknow
Fund manager Appala argued, however, that SEBI's action against Jane Street is already yielding dividends. Even as the firm pushed the market to an extreme, the regulators have made corrections.
'Now SEBI and the Finance Ministry are discussing ways to rein in F&O trading, and to strengthen the cash market. Another step they've taken is to limit weekly options expiry to just one per week. It helped bring back sanity,' Appala added.
Per NSE's average daily volumes data, equity futures have dropped from Rs 2,09,327 crore in FY25 to Rs 1,68,430 crore in FY26. Equity options have fallen from Rs 71,961 crore to Rs 55,514 crore over the same period.
'The market tells you the participation has reduced,' Appala noted.
Among those who have quit stock trading is Ritesh. He once spoke fluently about calls, puts, premiums, and expiry days, but they are no longer part of his daily vocabulary. Only his wife knows how much money he lost.
'She's impatient and taunts me,' he said quietly. 'She asks how much money will I lose now? It stresses me out.'
From running a family business started by his parents, he's now building a small bakery business with his wife. Every evening, he packs the orders, and delivers them in his car.
He's not entirely immune to new and shiny ways to make money. A few months ago, he nearly spent Rs 97,000 on an AI course until he thought better of it. He says he's rebuilding himself. 'My loss,' he added, 'has been my biggest teacher.'
What is taking longer to change is his social media feed. The same influencers, the same promises keep coming up. Since January, he's been unsubscribing from the trading channels he once followed religiously.
'I lost money, but I have clarity now. I know who makes profit, and it's not small traders like me,' he said with a dry laugh.
(Edited by Asavari Singh)