FROM DALAL STREET BUZZ TO PARLIAMENT HEAT: DECODING THE JANE STREET GAME

It began on a quiet Thursday in Mumbai. As the opening bell rang on Dalal Street, a surge in the Nifty Bank index signaled bullish sentiment.

- MAYANK MOHANKA

But far away in New York, at quant trading giant Jane Street, a deeper play was unfolding—an algorithmic rig, masked as momentum and powered by speed.

As volatility gripped Dalal Street, its echoes reached Parliament Street, home to India's market watchdogs. This wasn't just about price—it was about integrity. Was Jane Street's edge really strategy and speed, or market manipulation disguised as both? What started as whispers about expiry-day trades soon escalated. After months of surveillance, Sebi issued a hard-hitting interim order against Jane Street and its affiliates.

Jane Street's alleged playbook: According to the order, Jane Street executed a clever but deceptive playbook. On key Nifty Bank expiry days, it would buy large volumes of key banking stocks in the cash market during early trading hours. This buying lifted Nifty Bank sharply, creating the illusion of a bullish market.

With the index climbing, they simultaneously bought put options—bearish bets—at dirt-cheap prices while the rest of the market was euphoric. Then came the twist: after securing the options, they dumped the same banking stocks, causing a sharp market fall. As Nifty Bank dropped, the value of those put options skyrocketed, allowing Jane Street to book massive profits.