The $5 Billion Baazigar: SEBI Unmasks Jane Street’s High-Stakes Market Manipulation

In a blockbuster revelation, SEBI has accused U.S.-based quant trading giant Jane Street of executing a calculated “Baazigar strategy”—deliberately incurring ₹7,687 crore ($1 billion) in losses across stock futures and cash trades to rake in ₹43,289 crore ($5 billion) in options profits. The firm allegedly manipulated the Nifty Bank index on expiry days to mislead retail investors and profit from distorted options pricing.

 

Key Highlights:

 

Jane Street made ₹43,289 crore in options profits while booking ₹7,687 crore in deliberate losses in futures and equities.

 

SEBI calls it “Intra-day Index Manipulation,” citing trades that propped up Nifty Bank before expiry, only to reverse them for options gains.

 

On Jan 17, 2024, Jane Street bought ₹4,370 crore in Nifty Bank stocks, then dumped them later, profiting ₹735 crore in options.

 

SEBI has barred Jane Street and four affiliates from Indian markets and frozen ₹4,841 crore in alleged unlawful gains.

 

The firm disputes the findings and plans to appeal.

 

Outlook: SEBI’s crackdown marks one of the most aggressive actions against a foreign trader in India. It also raises urgent questions about regulatory gaps in high-frequency trading and the vulnerability of retail investors in the booming options market.

 

Source: MSN Money