←back to thread

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

(www.cnbc.com)
518 points bwfan123 | 8 comments | 06 Jul 25 14:03 UTC | HN request time: 0.217s | source | bottom
Show context
cs702 ◴[06 Jul 25 20:47 UTC] 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.

replies(22): >>44483959 #>>44484082 #>>44484085 #>>44484194 #>>44484621 #>>44484974 #>>44485377 #>>44485557 #>>44485564 #>>44485830 #>>44485855 #>>44485873 #>>44486444 #>>44487132 #>>44487671 #>>44487911 #>>44487912 #>>44489362 #>>44490126 #>>44492949 #>>44497566 #>>44499330 #
Horffupolde ◴[06 Jul 25 21:11 UTC] No.44484085[source]▶
So why can’t other players detect this behavior and trade with JS, removing their edge?
replies(3): >>44484238 #>>44484291 #>>44484592 #
1. posnet ◴[06 Jul 25 22:16 UTC] No.44484592[source]▶
Most exchanges do not reveal counter-party information smaller than the broker level. So you wouldn't know just from looking at market activity the same person causing the large futures move was also taking large options positions.
replies(2): >>44484698 #>>44485926 #
2. londons_explore ◴[06 Jul 25 22:29 UTC] No.44484698[source]▶
Doesn't matter - see a pattern, exploit it - and in doing so, make profit yourself whilst reducing the pattern.
replies(3): >>44485103 #>>44485961 #>>44486244 #
3. efavdb ◴[06 Jul 25 23:28 UTC] No.44485103[source]▶
Yes claim is price is high at open low at close. Seems pretty straightforward.
4. 0xDEAFBEAD ◴[07 Jul 25 01:45 UTC] No.44485926[source]▶
Why not reveal counter-party info?
5. jayd16 ◴[07 Jul 25 01:50 UTC] No.44485961[source]▶
Simply look at the market patterns and make a profit, duh! Why doesn't everyone do that?!
replies(2): >>44487428 #>>44487878 #
6. SpicyLemonZest ◴[07 Jul 25 02:38 UTC] No.44486244[source]▶
The pattern was exploitable only on the specific days that Jane Street was allegedly manipulating. How would you have figured out, without counterparty information and before noisy sales start dragging down the index, that day X is a manipulation day?

How would you have identified that there's even such a thing as a manipulation day? Do you have a model that tells you the objectively correct number of days a non-manipulated index should be lower at close?

7. yorwba ◴[07 Jul 25 06:54 UTC] No.44487428{3}[source]▶
Usually, everyone does do that, which is why only hard-to-detect patterns remain profitable. Not something obvious like "buy options in the morning and sell in the evening" as in this example.

But maybe Jane Street only traded like this on some days, so you would need to know whether they had done so before you could hope to exploit them.

8. ExoticPearTree ◴[07 Jul 25 08:12 UTC] No.44487878{3}[source]▶
> Simply look at the market patterns and make a profit, duh! Why doesn't everyone do that?!

I know your question was sarcastic, but not everyone is able to see patterns. And not every trader is as good as the other. Hence winners and losers.