SEBI Banned Jane Street After Rs 36,500 Cr Windfall in India

The Securities and Exchange Board of India (SEBI) has accused global trading giant Jane Street Group of manipulating India’s stock market—specifically the BANKNIFTY index—to make massive profits. 

According to SEBI, Jane Street used unfair trading strategies to influence market prices and earned over Rs 36,500 crore in profits, mainly from index options trading.

Who is Jane Street?
Jane Street is a global proprietary trading firm that trades in stocks, derivatives, and financial instruments. It has offices in the US, Europe, and Asia, including operations in India. In India, it operates through entities like:
JSI Investments Pvt Ltd
JSI2 Investments Pvt Ltd
Jane Street Singapore Pte Ltd
Jane Street Asia Trading Ltd

All these entities are part of the Jane Street Group.

What triggered the SEBI investigation?
In April 2024, media reports came out about a legal dispute involving Jane Street and Millennium Management in the US. These reports suggested that Jane Street’s proprietary trading strategies might have been misused in the Indian options market. That caught SEBI’s attention.
SEBI then:
Asked the NSE (National Stock Exchange) to investigate,
Interacted with Jane Street representatives,
Reviewed their trading patterns,
And eventually issued a detailed interim order in July 2025.

What did Jane Street allegedly do?
SEBI found that Jane Street manipulated prices on index expiry days—when stock index options (like BANKNIFTY) expire. Here’s how it worked, explained step-by-step:
The Alleged Trading Strategy (Simplified)

Step 1: Push the index up artificially (morning session)
Jane Street aggressively bought BANKNIFTY stocks and futures—like ICICI Bank, HDFC Bank, Axis Bank, etc.
This pushed the BANKNIFTY index up, even though the market sentiment was weak.

Step 2: Bet against the index in the options market
At the same time, Jane Street bought put options (bets that the index will fall) and sold call options (bets that the index will rise).
These trades were placed at favorable prices because the index was temporarily high due to Jane Street’s own buying.

Step 3: Sell the stocks to crash the index (afternoon session)
Later in the day, Jane Street sold off the BANKNIFTY stocks it had bought earlier.

This caused the index to fall sharply, making the put options very profitable.

Result:
Small losses in stock trades,
But huge profits in options trades.

SEBI said this strategy misled other traders, especially retail investors, who thought the market was strong because of the rising index.

How much money did Jane Street make?
SEBI’s analysis (Jan 2023 to Mar 2025) found:
Total profit: Rs 36,502 crore
Profit from index options alone: Rs 43,289 crore
Losses in other segments (stocks/futures): Rs 7,687 crore

On one single day—January 17, 2024—Jane Street made Rs 735 crore profit by using this strategy.

Who was affected?
SEBI pointed out that millions of small traders were unknowingly affected. For example, on Jan 17, 2024:
Just 4,675 entities traded in BANKNIFTY stocks
But over 16 lakh traders traded BANKNIFTY options
These traders relied on index movements (driven by cash and futures markets) to decide their trades. But SEBI says Jane Street manipulated those signals, misleading the entire options market.

Did SEBI warn them?
Yes. In February 2025, NSE sent a caution letter to Jane Street, asking them not to take such large positions or follow such trading patterns. But SEBI says the firm ignored this warning and continued similar trades in May 2025.

What happens now?
SEBI has issued an interim order using powers under the SEBI Act. It bars Jane Street from continuing such trading strategies until the investigation is completed. The matter is still under review and could lead to stricter penalties if wrongdoing is confirmed.

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Final takeaway
Jane Street, a major global trading firm, is under SEBI’s scanner for allegedly manipulating expiry-day index movements to earn thousands of crores in profits. The case highlights serious concerns about fairness and transparency in India’s financial markets—especially in the fast-growing options trading segment.