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

(www.cnbc.com)
518 points bwfan123 | 5 comments | 06 Jul 25 14:03 UTC | HN request time: 0.831s | source
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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.

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1. throwaway2037 ◴[07 Jul 25 00:42 UTC] No.44485557[source]▶

    > However, given the scale of the operation, Jane Street's actions sure look like textbook market manipulation. Calling it like I see it.
I am unsure that the US SEC would agree with you. Buying and selling "a lot" is not clearly market manipulation in the US.

Finally, in my view the India SEBI rules are insanely vague and are written to grant a lot of leeway to the regulator.

The real problem that no one is talking about: Why is India allowing its derivatives markets to explode? An estimated NINETY percent of retail derivs "investors" (I prefer the term "gamblers") lose money in India. Lots of these loses are gains for foreign banks and hedge funds. India: What the hell are you doing!?

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2. adw ◴[07 Jul 25 02:15 UTC] No.44486102[source]▶
It’s legal gambling (same as the retail crypto and stock trades in the US). I’d expect that the legalisation of sports markets in the US has meaningfully moved exploitable punters out of the markets and into the bookmakers.
3. riffraff ◴[07 Jul 25 05:24 UTC] No.44487022[source]▶
Isn't the figure of retail losing money on daily trading similar in other markets?

I think eToro disclosed that on their app, people using CFDs were losing money 76% of the time.

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4. joncrocks ◴[07 Jul 25 09:35 UTC] No.44488430[source]▶
I think the SEC would say it's about intent. If your intent for buying/selling is to impact the price rather than buying/selling the asset in question, then you are trying to manipulate the market.

The size question is important here due to the fact that large quantities are likely to influence price (and everyone knows this) so you might need an strong alternative explanation for your actions.

5. throwaway2037 ◴[08 Jul 25 11:25 UTC] No.44499006[source]▶
In the UK, unlisted derivs (CFDs, etc) dealers that target retail are required to display in print and TV adverts what percent of customers lose money. It is always way more than 50%!