SEBI alleges Jane Street placed bets on the stock market falling and then acted in a way to make the market actually fall so it could win its bet.
Syed Firdaus Ashraf/Rediff offers a ready-reckoner on Jane Street's alleged manipulation of the stock market.
What is Jane Street?
Jane Street is a 'quantitative trading' or 'quant trading' company which uses mathematical models and statistical analyses to identify and execute stock trades.
It has more than 3,000 employees in five offices across the United States, Europe and Asia.
Jane Street trades in 45 countries.
The company was established in 2000 and its annual revenue in 2024 was $20.5 billion.
What is the alleged fraud they committed in India?
According to the market regulator Securities Exchange Board of India (SEBI), Jane Street manipulated the Indian stock market and made a profit of Rs 36,502 crore (Rs 365.02 billion) between January 2023 and May 2025.
How did Jane Street do this?
This was the core idea (to use a simple analogy).
Imagine you're betting that a football team will lose.
But secretly, you also 'bribe a few players' to play badly so that your bet turns out right.
That's cheating, because you rigged the game to profit from your own bet.
This is what SEBI alleges Jane Street did as it placed bets on the stock market falling and then acted in a way to make the market actually fall so it could win its bet.
But, before you try to understand the Jane Street scandal, you need to understand some basic stock market jargon.
Call Option: A bet that the stock market or a particular stock will go up.
Put Option: A bet that it will go down.
Expiry Day: The final day when bets (options) are settled, like on match day for betting.
So what is Jane Street alleged to have done?
It bet that the market would fall.
Specifically, it placed bets using put options that would make money if the market (Nifty/Bank Nifty) dropped.
Then it pushed the market up.
In the morning, it 'bought' a huge amount of shares, which temporarily pushed the market up. This made it look like it was going to lose the bet.
At the last moment, Jane Street made the market fall. Right before the market closed, it 'sold everything very quickly', causing the market to 'drop sharply'.
This made the earlier bets (that the market would fall) very profitable.
Jane Street repeated this again and again
What did SEBI find?
SEBI found that Jane Street did this on at least 18 different days and that too all on 'expiry days' (when the bets are finalised).
How did Jane Street profit?
By manipulating the market, it made thousands of crores in profit from these bets. The amount is estimated to be Rs 36,500 crore.
Yes, it did lose some money in the 'push-up and sell-off' process, but made much more from the winning bets by netting huge profits.
Why is this a problem?
It's like playing both player and referee in a game, and hence 'unfair to other traders' and 'illegal'.
Innocent investors who didn't know the market was being manipulated may have lost money.
What is SEBI saying?
SEBI calls this 'fraud and market manipulation' because Jane Street didn't just bet on the market but it made it move in its favour.
What action has SEBI taken against Jane Street?
SEBI in its interim order on July 3 has debarred JSI Investments, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading, collectively referred to as the Jane Street group from participating in the Indian securities markets and ordered it to cough up its unlawful gains of Rs 4,843 crores (Rs 48.43 billion), according to the Mint newspaper. The Sebi probe against Jane Street is ongoing.
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