Jane Street barred from Indian markets as regulator freezes $566M

What is „market manipulation“ actually vs non-manipulative buying and selling to make a profit?

Take the example of spoofing. A trader puts in a 10mm order on the bid in futures, and then pulls it once price gets near him. He then develops an automated trading strategy that capitalizes on the volatility spike in the options market when this bid hits the tape.

This example has two common characteristics of market manipulation - using size to push markets in a direction for personal benefit, and putting the bid in with sole intent to push the market, as in there was never any desire to see the order actually get filled.

If Jane Street was selling options that were only profitable within the context of a strategy that involved pushing massive size into the market near market close and forcing price down, that is likely categorized as manipulation. On the other hand, if they were moving inventory and in the process moved price, and they tweak their trading strategies to further profit from this, that's a more arguable position.

> What is „market manipulation“ actually vs non-manipulative buying and selling to make a profit?

directly proportional to the distance from the courts/judges/regulators

market manipulation is when you place/cancel an order with the intention that the market will react to you in a specific way, with no intention of that order actually executing.

That’s called spoofing and is a very small subset of market manipulation (which is when you manipulate the market).