How Jane Street Manipulated the Derivatives Market

(Jane Street was founded by a small group of traders and technologists in a tiny New York office. Today, it has more than 3000 employees across five global offices and trades a broad range of asset classes on more than 200 venues in 45 countries. By leveraging cutting-edge algorithms and ultra-fast trading infrastructure, the firm targeted India’s booming derivatives market.)

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India’s financial markets have been jolted by a landmark regulatory crackdown that could redefine how foreign proprietary trading firms operate in the country. At the heart of this storm is Jane Street, a globally renowned high-frequency trading (HFT) firm based in New York, known for its sophisticated, algorithm-driven strategies. The SEBI has accused Jane Street of manipulating the Indian derivatives market, triggering a regulatory response that signals a zero-tolerance stance against market abuse, no matter how advanced or globally respected the player involved.

Jane Street entered India in 2020 through entities like JSI Investments, JSI2 Investments, Jane Street Asia Trading, and Jane Street Singapore, partnering with Nuvama Wealth Management for its operations in the cash segment. By leveraging cutting-edge algorithms and ultra-fast trading infrastructure, the firm targeted India’s booming derivatives market, where the National Stock Exchange accounted for over 60 per cent of global equity derivatives trades.

Between January 2023 and March 2025, Jane Street reportedly earned ₹36,502 crore, including ₹735 crore in a single day—January 17, 2024. These eye-popping profits drew scrutiny. SEBI launched an investigation and uncovered a deliberate manipulation scheme designed to distort price discovery and unfairly profit from expiry-day volatility.

SEBI's 105-page interim order, backed by over 500 pages of annexures, outlined two core strategies used by Jane Street. First was