Made nearly 50% of it in Bank Nifty options ~ 17.3k crores
From the top 30 profit-ranked days, 19 were expiry days
Only used 2 strategies mainly for making this money
"Intraday Index Manipulation” Strategy (15 out of 18 times) ~ Buy stocks, buy cheap puts/sell costly calls and reverse the positions.
“Extended Marking the Close” Strategy (3 out of 18 times) ~ Buy options throughout the day at dead cheap prices and make a move in the last hour and closing at big gains at the end.
SEBI asks to pay 4843 crores/- only
Walks out with a 32k crore gain in 2 years.
Gets banned from Indian Markets
The Jane Street chapter ends. When one thing ends another begins
@nithin what are your thoughts on this whole jane street story? Will this ban lead to reduction in volumes and affect liquidity , eventually hurting exchanges and the ecosystem?
Actually only 10% of what they made will be recovered from them as per SEBI order.
Some are of the view that as there is no front running and just using arbitrage strategies what’s wrong with it.
This kind of manipulation is easy to catch and happened almost every weekly expiry. traders/brokers/news channels have been cautioned about such manipulative activity is going on for years, but last corrupt SEBI chief ignored it and punished retail traders with new regulations instead, maybe she received some kickbacks on her foreign accounts.
Great decision by SEBI but this will not stop Jane Street from entering through other FII. They can sell rights to their strategy to other firms and profit off of them for a percentage of profit.
SEBI needs to ban this kind of move entirely and daily regulate the market for such instances. Not only that, but they also need to make sure that firms don’t use the strategy in a joint manner. One entity buying options and then another entity manipulating the stocks. Then the other firm profiting jointly.
Plus there is a high chance that SEBI will eat up money and then let them get back to the markets. Historically SEBI has extensively made out of court settlements so I don’t expect anything to really happen here. It’s just a short bump in the road for JS. They’ll be back in business soon.
3+ years of manipulation and they couldn’t identify one culprit. Lol it’s a joke of the regulator can’t do its job. Investors have been crying out loud for years now and SEBI was tone deaf.
