How Jane Street made profit Rs 735 crore in a day? SEBI Expose Manipulation

How Jane Street made profit Rs 735 crore in a day SEBI Expose Manipulation.
How Jane Street made profit Rs 735 crore in a day SEBI Expose Manipulation.
Rs 36,000+ Crore in 2 Years! SEBI Exposes Jane Street’s Index Manipulation Pattern

How Jane Street Made Rs 735 Crore in a Day: SEBI Exposes Market Manipulation

In a major jolt to Indian financial markets, Jane Street Group, a U.S.-based quantitative trading giant, has been barred from operating in India. The action follows a detailed investigation by the Securities and Exchange Board of India (SEBI). The probe uncovered a massive market manipulation scheme.

According to SEBI’s order released in July 2025, Jane Street made a staggering Rs 735 crore in just one trading day—January 17, 2024. This was the firm’s most profitable session ever on Dalal Street.

But the story doesn’t end there.


A Deeper Look at Jane Street’s Indian Market Earnings

SEBI’s report shows that Jane Street earned Rs 36,502 crore in India between January 2023 and March 2025. Much of this came from algorithmic and high-frequency trading strategies.

These methods, as per the regulator, were designed to mislead retail traders and manipulate price movements, particularly in index derivatives.

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What Happened on January 17, 2024?

A Sudden Market Drop

The Bank Nifty Index opened at 46,573.95, far lower than the previous close of 48,125.10. This fall was blamed on HDFC Bank’s weak earnings, which were published the evening before.

SEBI alleges that Jane Street took advantage of this market drop using a two-phase strategy.


Phase I: Creating a False Sense of Recovery

In the morning, Jane Street purchased Rs 4,370 crore worth of Bank Nifty stocks and futures. This aggressive buying pushed prices upward. As a result, it created a misleading sense of recovery in the market.

Other traders believed the index was rebounding and joined the rally.


Phase II: Reversal and Profits from Options

Once the market sentiment improved, Jane Street reversed its long positions, selling aggressively. This move dragged down stock prices again.

Meanwhile, Jane Street had already built massive bearish positions in index options. These included cheap puts and expensive calls, worth over Rs 32,000 crore.

As the index fell again, put options surged in value, while call options collapsed. SEBI confirmed that the profit from options far outweighed the losses in cash and futures.


Not Just One Day: A Repeating Strategy

SEBI found that this was not a one-time incident. On 15 out of 18 days examined in detail, Jane Street used the same intraday index manipulation strategy.

On the other three days, it used a different tactic called “Extended Marking the Close”. This involves influencing prices during the last trading minutes of the day.

Shockingly, this tactic appeared again in May 2025, even after SEBI’s February warning letter to the firm.


Ignoring Warnings and Compliance Promises

Despite being cautioned by the National Stock Exchange (NSE) in February 2025, Jane Street allegedly continued these manipulative trades.

The firm even ignored its own compliance commitments. This led SEBI to act aggressively to protect market integrity.


SEBI’s Action: Ban, Asset Freeze, and Penalties

SEBI’s July 2025 order included strong penalties:

  • A ban on Jane Street and four affiliate entities from Indian securities markets.
  • A freeze on all Indian bank withdrawals by the group.
  • An order to impound Rs 4,840 crore in illegal profits.

This marks one of the strictest crackdowns on foreign algorithmic traders in Indian market history.


A Bigger Problem: Global Algorithms vs. Indian Retail

SEBI’s report also raises alarm over a wider systemic imbalance. It noted that Jane Street consistently took massive risks in the F&O segment, especially on index expiry days.

The regulator said these trades created temporary but misleading price movements. These movements often tricked unsuspecting retail investors into buying or selling at the wrong time.

SEBI added:

“Other traders were unaware of Jane Street’s intent to reverse its positions. They acted on misleading price signals.”

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Conclusion: Time for Stronger Regulation

The Jane Street episode is a wake-up call for Indian markets. While algorithmic trading adds liquidity, it also brings new risks, especially to retail traders who lack the tools to respond instantly.

SEBI’s action shows that manipulation—no matter how technical—will face serious consequences. As Indian markets grow and attract global interest, regulators must adapt their surveillance and protect market fairness.

This case sets a strong precedent, highlighting the need for vigilance, integrity, and transparency in today’s data-driven trading era.