Teaching Note: Jane Street in India: arbitrage or market manipulation?

In July 2025, Jane Street Group (JS Group), a leading high-frequency trading firm, found itself at the centre of regulatory scrutiny in India following interim restrictions imposed by the Securities and Exchange Board of India (SEBI). The regulator alleged that certain derivatives trading strategies employed by the firm – particularly around index options expiry – were structured in a manner that influenced price movements in underlying securities and generated substantial gains. Over a relatively short period, the JS Group reported significant profits in index options while incurring losses in cash and futures segments, raising questions about the intent and design...