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News18
05-07-2025
- Business
- News18
Jane Street Offered Rs 4.3-Crore Package To IIT Madras Student Before Sebi Crackdown
Last Updated: The Rs 4.3-crore offer reflects Jane Street's high-stakes trading environment and its need for individuals with advanced skills in maths, coding, and real-time decision-making. Jane Street Salary: Global trading firm Jane Street Group LLC, which has been barred by markets regulator Sebi for allegedly executing a large-scale manipulation strategy in India's derivatives market through sophisticated algorithmic trading, had earlier offered a jaw-dropping Rs 4.3-crore annual package to a student from the Indian Institute of Technology (IIT) Madras. The Jane Street pre-placement offer, during the last IIT Madras placement season, made headlines in December 2024 as it was the highest package during the season. The Rs 4.3-crore offer reflects Jane Street's high-stakes trading environment and its need for individuals with advanced skills in mathematics, programming, and real-time decision-making. Jane Street's interview process often includes multiple rounds of quantitative problem-solving, coding challenges, and probability puzzles — all aimed at testing raw mental agility. Jane Street is known globally for its lucrative compensation packages and its famously rigorous hiring process. According to Economic Times, the firm routinely recruits from Ivy League and top-tier global universities including MIT, Harvard, Cambridge, Oxford, Stanford, and Princeton. India, with its rich pool of mathematical and engineering talent, particularly from IITs, has increasingly featured on its recruitment radar. Why Is India A Growing Priority for Global Quant Firms? India's growing prominence as one of the world's five largest equity markets has made it a strategic focus for global proprietary trading houses. Firms like Jane Street have expanded operations in the country to tap into both the local talent pool and the rapidly growing derivatives market on the National Stock Exchange (NSE) — one of the world's busiest options markets by volume. Jane Street operated in India through its associate firms — JSI Investments Pvt Ltd and JSI2 Investments Pvt Ltd. Until recently, it maintained a low public profile despite its deep involvement in quantitative trading strategies in Indian markets. Jane Street Banned The Securities and Exchange Board of India (SEBI) issued a 105-page interim order dated July 3, imposing severe restrictions on Jane Street's entities in India. The regulator said the entities engaged in a manipulative trading strategy involving the deliberate misuse of index options and futures to generate unlawful profits worth Rs 4,843.57 crore. Sebi accused Jane Street's entities of making Rs 43,289 crore in profits from options while deliberately booking Rs 7,208 crore in losses through futures and equities — a method seen as distorting the integrity of the market. The total notional impact of the alleged scheme stood at Rs 36,500 crore. The order directed Jane Street's entities to deposit the alleged illegal gains in an escrow account with a lien in SEBI's favour. The regulator also froze their bank, demat, and custodial accounts, with instructions to block all debits unless cleared by SEBI. Between January 2023 and March 2025, Jane Street entities made over Rs 43,289 crore in profits from index options, particularly Bank Nifty (BANKNIFTY) using various strategies that allegedly manipulated markets. These profits were partly offset by losses in other segments like stock futures and cash equity, resulting in a net gain of Rs 36,502 crore. In a 105-page order, Sebi highlighted two key manipulative strategies — 'Intraday Index Manipulation Strategy' and 'Extended Marking the Close Strategy'. 1. Intraday Index Manipulation Strategy Citing an example of January 17, 2024, when Jane Street made its biggest single-day profit of Rs 734.93 crore, Sebi said Jane Street aggressively bought stocks in the Bank Nifty index (like ICICI Bank, Axis Bank, HDFC Bank) in the cash and futures markets in the morning session. This artificially pushed the index higher. Simultaneously, it built large short positions in Bank Nifty options by selling call options at inflated premiums, and buying put options at lower prices. Later in the day, Jane Street sold off those same stocks, causing the index to drop. This boosted the value of their put options and rendered call options worthless, ensuring massive profits. 2. Extended Marking the Close Strategy On certain expiry days, Jane Street allegedly manipulated prices in the last two hours or near the market close, a crucial window for settling F&O contracts. Jane Street Reacts Jane Street, in response to the allegations, has pushed back. In an email statement to Reuters, the firm said: 'Jane Street is committed to operating in compliance with all regulations in every region where we operate globally. We dispute the findings of the SEBI interim order and will continue to engage with the regulator." The case remains under detailed investigation. SEBI's interim order currently bars Jane Street entities from buying, selling, or dealing in securities — directly or indirectly — on Indian exchanges. What Is Jane Street? top videos View all Founded in 2000, Jane Street is one of the largest proprietary trading firms in the world. The company trades more than $17 trillion annually across asset classes, including equities, ETFs, bonds, options, and crypto. Its global operations span New York, London, Amsterdam, Singapore, and Hong Kong. Despite its global scale, Jane Street is famously media-shy and rarely makes public appearances. Its influence, however, is vast — from being a major liquidity provider in global ETF markets to actively participating in high-frequency trading and arbitrage strategies. Stay updated with all the latest news on the Stock Market, including market trends, Sensex and Nifty updates, top gainers and losers, and expert analysis. Get real-time insights, financial reports, and investment strategies—only on News18. Location : New Delhi, India, India First Published: July 05, 2025, 14:03 IST News business » markets Jane Street Offered Rs 4.3-Crore Package To IIT Madras Student Before Sebi Crackdown
Time of India
05-07-2025
- Business
- Time of India
'Marking the close' explained in 5 points: Trick inside Jane Street's alleged manipulation playbook
Jane Street Group LLC, a US-based global proprietary trading powerhouse, which allegedly manipulated the Indian derivatives market, employed a strategy called 'Marking the close' on the Nifty index options. Here is a 5-point explainer on how this strategy works and why it is illegal: 1) Any option contract has an underlying stock, and its premium moves with the price of the underlying stock. For Instance, HDFC Bank's CALL option premium will rise if the stock price of HDFC Bank rises while its PUT option premium will rise with a fall in its price. 2) The logic can be extended to the index options, too. For instance, if the Nifty index moves higher, then the Nifty CALL option premium increases and the same is the case with the Bank Nifty. For index options, the underlying is the index itself, which in turn is a basket of stocks. 3) How Options premiums work Option premiums are calculated based on stock/index's current price vis-a-vis the strike price. Strike price is the price at which you exercise the option. So Premiums are high when they are at-the-money or in-the-money. -- In-the-money (ITM) call option: Current price is higher than strike price -- In-the-money put option - Current price is lower than strike price -- At-the-money (ATM) call/put option: Current price is close to strike price 4) On expiry days, OTM (Out of the Money) options are cheap because they are likely to expire worthless. ATM options are most volatile because they near the strike price and anything can happen. But for ITM options, they are fully loaded and available at a premium. Read More: Sebi may widen Jane Street probe to other indices, exchanges: Report For an options trader, the catch lies in the transition of premiums if he can buy a cheap OTM option for 50 paisa or a rupee and then watch it grow to Rs 10, 20 or even 100 in a matter of a few hours. Traders with deep pockets can make this possible and Jane Street's deep pockets seem to have that kind of money. 5) On the expiry day, you buy all the cheap Index OTM options on one hand and on the other hand, you either buy or sell the index underlying constituents to an extent where the options start to move in your favor. Sophisticated traders can do it by just buying or selling heavyweight stocks of the index. Traders can buy all the cheap options before 3 pm and after that, they can accordingly make orders worth crores of rupees in the heavyweight stocks. It can be done through algorithms which know the exact quantity, price and time, which makes computation of the expiry closing price easy, as the closing price is the weighted average of the last 30 minutes. The algorithms know the closing price which in turn makes your position favourable. Also Read: Jane Street Fallout: Zerodha's Nithin Kamath flags risk to brokers and stock exchanges Why is it illegal? Market regulator Sebi holds this as an unfair, deceptive, and manipulative practice that violates its norms. Sebi's 105-page order holds that Jane Street made unlawful gains through this. Jane Street has refuted these allegations and has said that it will engage with the regulators. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Time of India
05-07-2025
- Business
- Time of India
Jane Street's Rs 4 crore IIT talent hunt came before Sebi's Rs 36,500 crore manipulation bombshell
Global proprietary trading powerhouse Jane Street Group LLC, which has made headlines for alleged manipulation in India's derivatives market through associate entities, had offered a Rs 4.3-crore annual package to an IIT Madras student prior to the Sebi ban order. The viral news of this extraordinary offer highlighted Jane Street's lucrative compensation and rigorous recruitment process, which aligns with its global practice of hiring from top-tier universities such as MIT, Harvard, Cambridge, Oxford, Princeton, and Stanford. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like War Thunder - Register now for free and play against over 75 Million real Players War Thunder Play Now Undo And yet the low-profile Wall Street firm operates away from the public glare. Jane Street Group LLC operated in India through its associate entities — JSI Investments Private Limited and JSI2 Investments Private Ltd. Jane Street pulled off a Rs 36,500 crore alleged market scam making a whopping Rs 43,289 crore options profits while deliberately losing Rs 7,208 crore in futures and equities. Live Events The market watchdog in a 105 page order issued on Thursday imposed comprehensive interim restrictions on Jane Street pending detailed investigation. Jane Street entities are completely restrained from accessing securities markets and prohibited from buying, selling, or dealing in securities directly or indirectly. The regulator also ordered impounding of Rs 4,843.57 crore in unlawful gains, requiring Jane Street to deposit this amount in an escrow account with a lien in favor of SEBI. All bank accounts, demat accounts, and custodial accounts are frozen, with no debits allowed without SEBI permission (though credits can be accepted). Jane Street has contested the order and stated it will engage further with the Sebi. In an emailed response to Reuters, the firm said, 'Jane Street is committed to operating in compliance with all regulations in every region where we operate globally. We dispute the findings of the SEBI interim order and will continue to engage with the regulator.' Read More: Explained: What is Jane Street and how it made Rs 36,500 crore profit by gaming Dalal Street Founded in 2000, Jane Street is renowned globally as one of the most sophisticated high-frequency trading (HFT) firms, executing trades worth hundreds of billions of dollars across multiple asset classes. The company employs over 2,600 people across five offices spanning the US, Europe, and Asia, and operates in 45 countries. The Jane Street Group LLC's associate entities operating in India were initially identified based on the domain , provided at the time of opening of trading accounts. Sebi concluded that this domain association corroborates the view that all the entities form part of the global operations of the Jane Street Group. Read More: Sebi may widen Jane Street probe to other indices, exchanges: Report Indian recruitment process: who gets hired and why? Jane Street seeks individuals with exceptional mathematical abilities and advanced programming skills, crucial for roles at its high-stakes trading desks. Its recruitment process is famously rigorous, involving multiple rounds of challenging quantitative interviews, probability puzzles, coding assessments, and real-time problem-solving tasks designed to test not just technical knowledge but also mental agility. India offers the company a reservoir of talented engineers and quantitative specialists. India's growing clout as one of the world's top five capital markets, makes it an attractive frontier for many like Jane Street to open networks. By building a strong presence in India, Jane Street aimed to tap into local talent for its global trading strategies while capitalizing on opportunities in Dalal Street's dynamic derivatives market. Also Read: Jane Street Fallout: Zerodha's Nithin Kamath flags risk to brokers and stock exchanges Globally, Jane Street operates through various regulated entities, including SEC-registered broker-dealers in the US, FCA-regulated firms in the UK, and authorized entities in Hong Kong and the Netherlands — each a subsidiary of Jane Street Group LLC — underscoring its commitment to rigorous compliance and operational excellence. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
