A large global trading company faces serious claims. The market regulator says the company used a smart and planned strategy to control index prices during the weekly end days in India. The company that worked through its companies in India and other countries created specific industries to push index prices in a direction they wanted. As a result, the company earned an illegal profit of around 4,843 crore.
Who is Jane Street?
Jane Street is a large and powerful high-existing trade company. It uses smart strategies based on mathematics, making it a leading quantitative trading company in the world. The company uses a super solid computer to buy and sell in the stock market. Every day it handles billions of dollars. Jane Street plays an important role in the market by helping other traders buy or selling quickly. It also helps to determine fair price for things such as ETF, alternative and index -related products.
Understand expiry days and index terminating
The expiry days occur when the futures and the option contracts end. These days, the market uses the final value of the index to dispose of these contracts. Businesses use a Termination Day Trading strategy and estimate where the index will be closed. If you change this final figure, it can lead to greater profits or losses depending on the trader.
The immediate exchange index calculates the closing price by using the Volume Factory average value (VWAP) for the shares. They do this during the last minutes of trade, called the closing auction window. Because of this, these last moments are very important during the expiry days and can aim for index closure of manipulation.
Regulator Steps In
On July 3, 2025, Securities and Exchange Board of India (SEBI) took strong measures against the companies involved. As part of the SEBI action for trade companies, it banned them from reaching the Indian stock market. SEBI also froze bank accounts and ordered them to draw up illegal profits in India for a price of 4,843.57 crore.
Sebi said that these companies created large, planned trades in cash, futures and option markets. These works may have affected the entire market and have increased serious concerns about market manipulation.
The Measured Playbook
SEBI’s investigation found two main strategies used for market manipulation:
- Intra-day Index Manipulation
- Extended Marking-the-Close
1. Intra-day Index Manipulation
This strategy showed up on at least 15 expiry days, mostly involving Bank Nifty. It followed three clear steps:
- Morning buildup: The traders bought large amounts of Bank Nifty futures and stocks early in the day.
- Options exposure: At the same time, they placed huge short bets on index options—mainly puts, and sometimes by selling calls.
- Afternoon unwind: Later, they quickly sold their earlier positions to push down the index. This helped them earn big profits from their short options.
Example: 17 January 2024
That day, traders bought 4,370 Crore Bank Nifty Futures and options in the morning. Later he sold Futures to the value of 5,372 crores. Although he lost about 61.6 crore on futures trade, he achieved about £ 735 crore from options. This gave him a net profit of around 673 crore in just one day.
Sebi called this cycle a “prima facie manipulative”. It was planned, coordinated and no real investments behind it. This strategy clearly showed signs of indexing of manipulation and was part of a smart outlet day trade strategy.
2. Extended Marking-the-Close
This method appeared in at least 10 expiry-day events. Here’s how it worked:
- The traders already held large options positions—both long and short.
- In the final hour of trading, they made big moves in the futures or cash market of the index’s stocks.
- These trades helped shift the index closing number slightly (or sometimes heavily), which favored their options positions.
Example: 10 July 2024
That day, the merchants kept the futures trades at 2800 crore and had smaller options of 44,154 crore. He traded the index and gave him more than 225 crore in profits.
Between January 2023 and March 2025, Sebi received similar trade patterns on five different occasions. One in May 2025, when the same strategy appeared on the Nifty index.
The Numbers: Immense Scale
The numbers in SEBI’s order show just how big this case is:
- The traders made ₹3,914 crore in profits from just 15 Bank Nifty expiry-day trades.
- Across both Bank Nifty and Nifty expiry days, they earned over ₹4,000 crore through illegal trading.
- SEBI has ordered them to deposit ₹4,843.57 crore into an escrow account.
- Over two years, they made more than ₹36,500 crore in net profits from index derivatives. At the same time, they lost around ₹7,687 crore in the cash and futures segments.
SEBI clearly said that normal trading methods—like arbitrage or hedging—cannot explain such large, planned, and high-volume trades focused on expiry days. This pattern points to possible index closing manipulation and a highly calculated expiry day trading strategy.
Warning Ignored
In February 2025, the National Stock Exchange (NSE) warned companies to stop taking large open positions and avoid suspicious trade. The companies promised to follow the rules. However, they continued to use similar termination day trading strategies until the end of May 2025.
Sebi called it “willful disregard of regulatory guidance”. This showed that the companies are carefully planning their trades to cheat other market participants and get unfair benefits.
Market effect and investor
Sebi’s order warned of a major problem. The company’s false tricks changed the prices of the index and provided incorrect indications to both retail and institutional investors. It was impressed when and how these investors made their trades, especially at the end of the end.
By creating false market activity, the company damaged the market’s justice. This is serious because more people trade on the end days, making them more sensitive to such features.
Why This Matters
1. Market integrity
Smart trade companies can use expiry days for the benefits to take big positions and work for settlement. While some trade on the expiry day is normal, checking the final result for manipulation in the market.
2. Investor reduces confidence
When the price moves are caused by targeted trades, the demand for the actual market – other traders, especially retail investors, cannot make decisions based on incorrect information. This increases the risk and loss of loss.
3. Regulator example
SEBI took strong measures by introducing £ 4843 crore, which is one of its greatest penalties. This order sends a clear message to prevent incorrect termination day trading and protect the market.
4. Surveillance interval
The case suggests that exchanges and regulators require better equipment and teamwork, which in order to see on the expiry day are closer and prevent such problems.
Reaction from the trade company
The company denies Sebi claims and says the trade follows all rules. This plans to explain its side and talk to SEBI to explain the page and find a solution. However, Sebi’s detailed report -105 pages long, repeats the company, intentionally, intentionally, not randomly.
Bottom Line
This case shows how the expiry day trade can be risky and composed. Large players can abuse settlement rules. Supervisors are now working strongly to fix the supervisory interval and protect the market. This sends a clear message: They will implement the rules to keep the market fair.
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