The ₹4,843 crore trick: How trading giant Jane Street gamed India’s market and got caught

Between January 2023 and March 2025, global trading giant Jane Street Group allegedly exploited India’s derivatives markets with a high-frequency strategy that SEBI now calls manipulative and unlawful. The firm’s profits from these trades? ₹4,843 crore—just part of the ₹43,289 crore it reportedly made in India during the period. 

Here’s how the firm operated, what SEBI found, and why the regulator came down hard.

Multiple entities, one playbook

Jane Street’s operations in India were spread across three registered foreign portfolio investors (FPIs): Jane Street Asia Trading Limited (JSATL), Jane Street India Trading Private Limited (JSITPL), and Jane Street Asia LLC (JSALLC). On paper, these were separate legal entities. 

But SEBI’s investigation concluded that they acted as a single group under common control, executing synchronized trades with near-perfect coordination.

Mirror trades with no real risk

SEBI found that these entities routinely took opposite positions in index derivatives—especially Nifty and Bank Nifty futures and options. One Jane Street entity would buy, while another sold, the same contract, at the same price and the same time. 

These were not hedging strategies or liquidity moves. They were paired trades executed within seconds—many reversed in under 75 seconds—designed to shift or stabilize prices without taking external market exposure.

Expiry-day manipulation

The trades were especially concentrated around monthly and weekly expiry sessions. Jane Street allegedly placed large orders in the final minutes of trading to influence the closing price of indices. Since index derivatives are settled based on the closing price, even small last-minute movements could lead to outsized profits. SEBI concluded that Jane Street used this tactic to ensure expiry levels aligned with their existing positions.

Circular trading and artificial volumes

SEBI also flagged circular trades—back-to-back orders between Jane Street’s own accounts that created a false appearance of liquidity and demand. These transactions didn’t involve real counterparty risk or economic purpose. Their primary function was to generate misleading market signals and influence pricing in a market that relies on transparent, competitive activity.

Profits declared unlawful

The regulator found that Jane Street’s trades distorted prices and manipulated settlement outcomes, resulting in unlawful gains of ₹4,843 crore. This sum, SEBI has ordered, must be fully impounded and deposited into an escrow account. The gains were not tied to organic market activity but to manufactured conditions designed to favor their books.

SEBI has barred Jane Street and all its India-linked entities from accessing the securities market until further notice. It has frozen their bank accounts, restricted withdrawals without SEBI’s approval, and ordered the closure of all open positions within three months or by contract expiry—whichever is earlier.

SEBI invoked violations under Section 12A(a), (b), and (c) of the SEBI Act and Regulations 3 and 4 of the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations. The message is unmistakable: coordinated, deceptive trading strategies—even by sophisticated global firms—will be identified, exposed, and acted upon.