Jane Street, a U.S.-based trading firm, has been accused of making massive profits in India’s Bank Nifty derivatives market, reportedly at the expense of retail investors. The alleged strategy involved buying Bank Nifty stocks and futures in the morning to push prices up, then selling large positions in the afternoon to drive prices down during the crucial last 30 minutes of trading. On certain days, this approach netted the firm hundreds of crores in a single session while retail investors faced steep losses. Watch the video below to see how these trades unfolded in real time.
The firm’s advantage came from cutting-edge infrastructure, including servers located near the NSE for millisecond execution, and a complex corporate setup that allowed it to take massive intraday positions. SEBI’s monitoring, based mainly on end-of-day reporting, failed to detect these activities for over two years. Retail investors, misled by morning rallies and trapped by afternoon declines, saw leveraged positions wiped out, driving derivative losses sharply higher.
In response, SEBI imposed a record ₹4,843 crore penalty and introduced reforms such as real-time monitoring, AI-powered surveillance, and stricter rules for algorithmic trading. Compared to the U.S., India still lags in proactive oversight and cross-market tracking, leaving investors exposed to fast, high-tech trading strategies.
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