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518 points bwfan123 | 5 comments | | HN request time: 0.68s | source
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cs702 ◴[] No.44483909[source]
According to Indian regulators, every trading day Jane Street would:

1) buy large volumes of stocks and/or stock futures that are part of an index tracking India’s banking sector, early in the day,

2) subsequently place large options trades, betting that the index would decline or volatility would spike later in the day, and

3) later in the day, cash out of the large long positions, dragging the index lower, making far more money on the options trades than on the long positions.

Jane Street can and likely will claim the firm was only arbitraging away pricing inefficiencies, nothing more, nothing less. It was just business as usual, etc., etc.

However, given the scale of the operation, Jane Street's actions sure look like textbook market manipulation. Calling it like I see it.

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Den_VR ◴[] No.44484194[source]
Maybe, but given the reputation of Indian regulators I’m skeptical Jane Street’s only sin was the alleged market manipulation.

People may recall the matter involving Adani Group. https://hindenburgresearch.com/adani-update-sebi/

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dyauspitr ◴[] No.44484217[source]
Seems presumptive to slander an entire nations regulatory group on a single/couple of examples. By that metric the regulatory group in the US is completely bought out since they let 2008 happen.
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sealeck ◴[] No.44484328[source]
There's a difference between "letting" something happen and actively doing something – it shows very different intentions. The events of 2008 were also caused by a cascading system failure involving lots of different components, which are hard for a single human to fully understand. The actions of the Indian regulator in the Adani case are much simpler, and their motivation is straightforward.
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1. dyauspitr ◴[] No.44484359[source]
One rotten regulator doesn’t mean you get to view the entire Indian regulatory environment as unreliable though. It’s the 4th/5th largest financial market in the world.
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2. Den_VR ◴[] No.44484496[source]
Is SEBI not the key regulator in this area?

To say it plainly, SEBI has been exposed for their selective enforcement on high-profile entities. If Jane Street’s in trouble with SEBI then it’s only because they failed to secure the same privileges as Adani, or Karvy, or Ramkrishna, or Sapre, or Kamath.

3. fastball ◴[] No.44485675[source]
Does the size of a market have some positive impact on the reliability of its regulatory body that I am not aware of?
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4. dyauspitr ◴[] No.44487209[source]
Yes, trust. Fully gamed systems will not have large willing participants.
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5. fastball ◴[] No.44487216{3}[source]
A market being large doesn't mean it has large participants.

But even then (and as seems to be the case in this instance), the market might have large participants because they are the ones doing the gaming, and are therefore happy to participate (even if trust is low).