Jane Street. Photo Credit: economictimes.indiatimes
Global trading firm Jane Street made headlines when it offered a lucrative ₹4.3 crore annual package to an IIT Madras student—an eye-catching move that preceded the Securities and Exchange Board of India’s (SEBI) interim order alleging ₹36,500 crore worth of market manipulation. The timing has intensified scrutiny over the firm’s operations in India’s high-volume derivatives market, reported Economic Times.
The IIT Recruitment Spree
Jane Street is renowned for hiring elite talent from top global universities. In India, the firm mirrored this strategy by offering a ₹4.3 crore annual package to an IIT Madras graduate—part of its aggressive push to establish itself in the Indian market and access high-level quantitative and programming expertise. This eye-catching package, reported just before SEBI’s action, highlights the firm’s confidence in leveraging Indian talent for its trading models.
SEBI’s Interim Order: Market Manipulation Accusations
On July 3, SEBI barred Jane Street and its Indian entities from all domestic securities trading. It alleged that between January 2023 and March 2025, Jane Street amassed approximately ₹36,502 crore in profits, primarily through index options. To enforce the ban, SEBI ordered the freezing of about ₹4,840 crore and mandated its placement in escrow.
How the Alleged Manipulation Worked
SEBI’s analysis identified “expiry-day” manipulation as the core mechanism. On key dates, Jane Street made large morning purchases of stocks and futures tied to Bank Nifty and Nifty to artificially inflate the index. Simultaneously, it held bearish options on the same index. By selling off its positions later in the day, it triggered an index drop—earning massive profits on put options. One striking example occurred on January 17, 2024, when the firm reportedly made ₹735 crore in a single day.
Pricing Strategy vs. Market Integrity
This manipulation—often described as “marking the close” or “pump-and-dump”—allegedly involved trading over 40 major stocks to sway index levels. SEBI asserts that this practice misled millions of retail investors, resulting in significant losses for the average trader.
Broader Implications for the Derivatives Market
India’s derivatives market accounts for roughly 60% of global equity derivatives volumes. SEBI’s move has triggered calls for regulatory reform: enhanced tracking systems, tighter expiry-day restrictions, and improved transparency in foreign investor structures. Analysts suggest that this episode will serve as a model for future regulatory vigilance.
Global Players Expanding in India
Despite SEBI’s clampdown, Jane Street’s recruitment push appears to have inspired other global firms—like Citadel Securities, IMC Trading, Optiver, and Millennium—to double down on India. They are scaling up local hiring and investing in better tech to capture a share of the booming derivatives flow.
What Happens Next?
Jane Street has 21 days to appeal SEBI’s interim order through the Securities Appellate Tribunal. The ongoing investigation may extend to other indices and exchanges. Meanwhile, regulators are reviewing both offshore and local trading activity to prevent future manipulation.
Final Word
The juxtaposition of a mega hiring spree and a market manipulation scandal paints a complex picture of global algorithmic trading entering India—a mix of ambition and overreach. The SEBI action demonstrates that while global players are eager to recruit top-tier talent, they must also adapt to India’s evolving enforcement landscape.
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