Rs 735 crore in 1 day! Jane Street's most profitable day on Dalal Street was built on Nifty Bank's fall
ADVERTISEMENT The profit was part of a larger Rs 36,502.12 crore that Jane Street earned across segments in India between January 2023 and March 2025. But SEBI's forensic probe zeroes in on January 17, 2024, when the firm allegedly executed an elaborate "Intra-day Index Manipulation" strategy in the Bank Nifty index and its constituents, leading to a windfall in index options.
On January 17, 2024, the Bank Nifty index opened sharply lower at 46,573.95, compared to the previous close of 48,125.10. 'Media reports claimed that this fall may be attributed to the market's apparent disappointment with the results announced by HDFC Bank after market close on January 16, 2024,' SEBI noted.
What followed was a two-part strategy that SEBI said helped Jane Street generate a net profit of Rs 734.93 crore in a matter of hours.
In the morning session—'Patch I'—the firm aggressively bought Rs 4,370 crore worth of Bank Nifty constituent stocks and futures, a volume SEBI described as significant in relation to the trading volumes in these markets. The purchases pushed prices upward and misled market participants into believing a recovery was underway.
'At a time when participants in index options markets are misled by the above support for Nifty Bank, JS Group builds effectively Rs 32,114.96 crores of bearish positions in the much more liquid Nifty Bank index options by buying cheap Put options and selling expensive Call options,' the order said.
ADVERTISEMENT In the second leg—'Patch II'—Jane Street reversed nearly all of its long positions. 'The sales are aggressive, in a manner that pushes down prices in the component stocks and hence the index. JS Group books losses in intraday cash/ futures market trading,' the SEBI order stated.But the losses in equities were dwarfed by the gains from index options. As the Bank Nifty index fell from the morning highs, the put options soared in value while call options lost steam. 'Profits in index options more than compensate for the JS Group's losses in intraday cash/futures trading,' SEBI said.
This was not a one-off. SEBI's investigation found Jane Street used the same 'Intra-day Index Manipulation' strategy on 15 of the 18 days it examined in detail. On the other three, the firm deployed a separate 'Extended Marking the Close' strategy, which was again seen on three more days in May 2025, after SEBI had already issued a cautionary letter.
ADVERTISEMENT Despite a February 2025 warning issued through the National Stock Exchange, 'JS Group continued with similar trades, in disregard of the caution letter from the Exchange… and JS Group's own commitments,' the regulator said.While the NSE closed its own probe into the matter, SEBI opted for a more aggressive stance. On Friday, it barred Jane Street and four affiliated entities from accessing the Indian securities market and ordered banks to freeze withdrawals from their accounts. The regulator also moved to impound Rs 4,840 crore in alleged illegal gains.
ADVERTISEMENT
Also read | Explained: What is Jane Street and how it made Rs 36,500 crore profit by gaming Dalal Street
The findings further underline concerns about the structure of India's derivatives markets, where sophisticated global players deploy algorithmic and high-frequency strategies against a sea of retail options traders. SEBI said Jane Street was 'consistently running what appeared to be by far the largest risks in 'cash equivalent' terms in F&O particularly on index option expiry days.'The regulator noted the 'intensity and sheer scale' of Jane Street's interventions in cash and futures markets, adding that the firm 'was aware that Nifty Bank was almost certainly likely to fall again by the end of the day, given their intent to aggressively sell back all of their morning purchases (and more).'
ADVERTISEMENT Other traders, however, 'were unaware of all this, and were hence enticed to deal at a time that the Nifty Bank itself was being artificially and temporarily propped up,' SEBI said.
Also read | Sebi bars U.S. trading firm Jane Street from Indian markets, orders Rs 4,840 crore freeze over alleged Nifty manipulation
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
(You can now subscribe to our ETMarkets WhatsApp channel)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hindustan Times
15 minutes ago
- Hindustan Times
Skoda Auto Volkswagen India expands portfolio with Bentley luxury cars
Photo: Bentley Flying Spur Check Offers Skoda Auto Volkswagen India Private Limited (SAVWIPL) announced on Monday that it has extended its brand portfolio by adding Bentley, the legendary British car company. Bentley has been added as the sixth marque under the Group's umbrella in India. Starting this month, SAVWIPL has become the exclusive importer, distributor and service provider for the Bentley luxury vehicles in India. Until now, Bentley operated in India through its partnership with Exclusive Motors. Bentley India's operations will be overseen by Abbey Thomas, the newly appointed Brand Director. Thomas will be responsible for leading the brand's operations and growth in the Indian market. Moreover, Bentley India is set to expand its presence with the introduction of three new dealer partners in key metropolitan cities—beginning with Bengaluru and Mumbai, followed by New Delhi. These upcoming showrooms will cater to India's ultra-high-net-worth clientele, offering Bentley's renowned luxury car models. Commenting on the entry of Bentley brand to the SAVWIPL, Piyush Arora, Managing Director and CEO of Skoda Auto Volkswagen India, said that the country's appetite for luxury vehicles is growing rapidly. 'Welcoming Bentley into the SAVWIPL family is a proud milestone that completes our portfolio — from the precision of German engineering to the timeless elegance and unmatched performance of British craftsmanship. Additionally, Abbey's deep understanding of the Indian market makes him the ideal leader to steer Bentley India toward new milestones," Arora said. Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape. First Published Date: 07 Jul 2025, 20:26 PM IST
The Print
17 minutes ago
- The Print
PSU sells Rs 52 insecticide-treated mosquito nets to govt for Rs 237 each: CBI FIR
It was the sole bidder despite lacking its own manufacturing capacity, quoting rates of Rs 228-Rs 237 per unit. The PSU — Hindustan Insecticides Ltd (HIL) — secured a Rs 29 crore contract from the Central Medical Services Society (CMSS) in 2021-22 for the supply of more than 11 lakh Long-Lasting Insecticidal Nets (LLINs) for malaria control over public procurement platform, Government e-Marketplace (GeM). New Delhi, Jul 7 (PTI) The CBI has registered an FIR in an alleged procurement scam wherein insecticide-treated mosquito nets, priced at Rs 49 to Rs 52 per piece, were reportedly procured and sold to the CMSS under the Union health ministry at inflated rates of Rs 228 to Rs 237 per piece by a public sector undertaking, officials said on Monday. HIL went on to subcontract the work to empanelled vendors, providing raw materials and chemicals while vendors undertook production and insecticide treatment. Bypassing the lowest bidder, Shobikaa Impex, the officials at HIL initiated a procurement chain that ultimately channelled the order through Mohinder Kaur Knitting Pvt Ltd, a company with no manufacturing capacity of its own, the FIR alleged. According to the FIR, the actual production was executed by VKA Polymers, which sold nets to JP Polymers — a closely linked firm — at Rs 49 to Rs 52 per unit. By the time the product reached HIL via this chain of intermediaries, the price had ballooned to Rs 87 to Rs 90 per unit. HIL, in turn, supplied the nets to CMSS at Rs 228 to Rs 237 per piece, raising suspicions of price manipulation and kickbacks. VKA Polymers and JP Polymers are interlinked entities managed by family members — Anand Samiappan and M. Sakthivel, respectively– the FIR alleged. It added that Balvinder Singh Tandon, Director of Mohinder Kaur Knitting, coordinated the execution of HIL's purchase orders through his company. The inflated pricing funnelled through multiple companies allegedly caused a loss of Rs 6.63 crore to CMSS, while HIL and its intermediaries profited from the markup. In its FIR, the agency has named Mohinder Kaur Knitting Pvt. Ltd, its Director, Balvinder Singh Tandon, VKA Polymers Pvt. Ltd and its Director, Anand Samiappan, JP Polymers & Nets and its partner M. Sakthivel, besides unidentified officials of HIL India Ltd and the Central Medical Services Society. The CBI has invoked sections of criminal conspiracy and cheating under the Indian Penal Code, as well as provisions of the Prevention of Corruption Act, against them. PTI ABS RHL This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
Time of India
17 minutes ago
- Time of India
Jane Street to contest SEBI's manipulation charges: Reports
Jane Street rejects allegations Jane Street vs SEBI Live Events Pushback on exchange claims (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Securities and Exchange Board ( SEBI ) has accused Jane Street , one of Wall Street's biggest trading firms, of running what it calls 'an intentional, well planned, and sinister scheme' to distort the country's markets. The Financial Times reported the regulator's findings on Monday. Reuters has not verified this Friday, SEBI barred Jane Street from trading in India and ordered it to return over 550 million dollars of what it describes as illegal profit. The ban follows allegations that Jane Street moved Indian bank stocks in ways that triggered large payouts on connected Street has told staff it will fight the ban. In a memo sent on Sunday to around 3,000 employees, senior management wrote they were 'beyond disappointed' by SEBI's 'extremely inflammatory' accusations.'It's deeply upsetting to see the firm mischaracterised this way,' said the memo, quoted by the Financial Times. 'We take pride in the role we serve in markets around the world, and it's painful to have our firm's reputation tarnished by a report based on so many erroneous or unsupported assertions.'Jane Street's trouble with SEBI links back to a lawsuit it filed last year against Millennium Management and two former traders who left for the hedge fund. In that case, Jane Street claimed the traders stole a valuable strategy that turned out to centre on Indian options. SEBI's probe zoomed in on Jane Street's trades linked to the BANKNIFTY index, which tracks India's major banking are now checking other parts of India's markets too. Jane Street has argued that the trades flagged by SEBI were nothing more than 'basic arbitrage trading', a normal practice in the order also says Jane Street ignored warnings from local stock exchanges. The firm disputes this point strongly. In the same memo to staff, Jane Street said the regulator used 'a metric for market impact and trading aggressiveness which seems disconnected from actual market dynamics'.The memo added that when exchanges first raised concerns, the firm 'immediately turned off its trading until we could better understand the exchanges' concerns' and later changed its approach to meet their 'preferences'.'Once again, we left this process feeling that we had reached an understanding of the concerns and reflected them in modifications to our trading behaviour,' the memo said. 'Since February, we have made ongoing efforts to communicate with SEBI and have been consistently rebuffed.'Jane Street has 21 days to object to SEBI's order and ask for a hearing. The firm says it is working on a detailed response and plans to fight the ban in the meantime, India's regulators say they may widen the investigation into other trades and instruments connected to the firm. Jane Street's future in one of Asia's biggest markets now hangs on how this fight plays out.
