How Jane Street Snatched ₹36,500 Crore While India's Youth Lost Everything

Imagine this: In the blink of an eye, while millions of everyday Indians were trying to make a little extra money in the stock market, one ultra-secretive American firm quietly raked in a whopping ₹36,500 crore in profits. At the same time, 1.13 crore Indian traders collectively lost ₹1.8 lakh crore – their hard-earned savings, sometimes even borrowed money, vanishing into thin air. 

The firm? Jane Street. And if you trade in futures & options (F&O), chances are you were a victim of their highly profitable game. 

Jane Street is an American trading firm founded in 2000. It’s not your typical Wall Street operation with shouting brokers, but with Harvard and MIT math wizards, coding in a language so obscure, 99% of programmers haven't even heard of it (OCaml, they call it!)

Jane Street is a shadow empire generating an annual revenue of $20.5 billion—higher than even Reliance Industries. They’re so secretive, employees don’t even whisper its name on LinkedIn. Their trading systems? Powered by over 70 million lines of code – more than Windows 10!.Shocking, right? 

When India's F&O market exploded post-COVID, drawing in everyone from students to professionals dreaming of quick riches. Over 1.13 crore people began trading F&O — that’s more people than the entire population of Rajasthan. The NSE became the world’s largest derivatives exchange, handling over 60% of global equity derivatives

In 2024, 43% of all F&O traders were under 30 years old—mostly students, fresh graduates, and early-career professionals.  

Jane Street saw not opportunity, but prey. Millions of young, inexperienced traders, armed with just a smartphone and a hopeful heart, walked right into their trap. The company set up servers inside the NSE, keeping execution times in microseconds while retail traders fumble with laggy trades on phones. 

Turns out, they weren't just trading; they were actively creating artificial price movements, especially on those crucial index expiry days. Their trick? An 'Intra-day Index Manipulation' strategy: they'd literally pump-up prices in the morning, then quietly rake in massive profits from their options bets. 

Let’s break down Jane Street’s trading strategy.

1. The Morning Push: First thing in the morning, they'd start aggressively buying huge amounts of stocks in cash and futures linked to that index.
2. The False Signal: These massive purchases would literally pump up the index's price, making it look like demand was booming and everyone should be buying. But it was totally misleading!
3. The Secret Bet: But here's the clever part: while they were pushing prices up, they were secretly holding massive "put options." These are special bets that only pay off big if the index price falls significantly. And they specifically chose "out-of-the-money" options, which are cheaper but incredibly risky unless you know what's coming.
4. The Crash: Once the index was artificially high, they'd suddenly "flip the switch." They'd dump all those stocks they bought earlier, causing the index's price to come crashing back down, often below where it started.
5. The Payday: As prices plummeted right towards the expiry time, their secret "put options" suddenly became wildly profitable. They essentially made money by creating the very price drop they bet on, leaving other traders in the dust.

It was a complex dance of buying and selling designed to create a false market signal, all to make their hidden options bets pay off spectacularly.

Take Bank Nifty, for instance—an index consisting of 12 banking stocks. But it's highly concentrated - just two stocks, HDFC Bank and ICICI Bank, control 53% of the index's movement.

On January 17, 2024, Jane Street executed its most profitable trade ever:

• The Bait: In the morning, Jane Street secretly bought ₹4,370 crore worth of top banking stocks (like HDFC Bank, ICICI Bank), artificially inflating Bank Nifty.
• The Hook: Retail traders, seeing the index rise, mistakenly thought the market was booming and eagerly bought 'call options' – betting on a further rise.
• The Trap: Meanwhile, Jane Street was silently building a colossal ₹32,115 crore position in 'put options' – betting on a crash.
• The Kill: In the afternoon, they ruthlessly dumped ₹5,372 crore of those very same stocks, sending Bank Nifty plummeting, just as planned.

The result? Retail traders lost big – their hope and money were crushed. Jane Street? They pocketed ₹735 crore profit in a SINGLE DAY.
 

They also played tricks like "marking the close," manipulating prices in the final minutes to maximize their gains from bearish positions. On July 10, 2024, they made large trades in the last 60–90 minutes of the day to influence the closing price of the index. They sold ₹2,800 crores worth of securities during the final hour—while holding ₹44,154 crores in bearish options.

All this, executed in microseconds by AI algorithms coordinating trades across multiple markets, while you were waiting 2 seconds for your phone trade to go through.

This isn’t just about numbers. It’s about real people and how their lives were shattered. Losses they probably couldn’t afford and may never be able to recover.

SEBI data shows 75% of F&O traders earn less than ₹5 lakh annually. And when the average loss is ₹2 lakh, these aren’t just bad trades—they’re life savings, emergency funds, or borrowed money.

The tagedies from Jane Street’s manipulation is heartbreaking: 

• K. Vamshi Kumar, a 31-year-old software engineer from Hyderabad, left his job to trade full-time. After heavy losses, he died by suicide.
• A 27-year-old engineer in Odisha lost ₹50 lakhs—all borrowed.
• Bhuvanesh, a Chennai-based trader, took his life after losing ₹10 lakhs.
• An engineering student lost ₹46 lakhs over two years with zero income.

When one person in an Indian household loses money, not just the entire family but generations suffer. Borrowed money often comes from parents, relatives, even grandparents. The psychological and financial toll affects generations. 

Jane Street's high-tech advantage, with co-located servers giving them lightning speed and private data on order flows, meant retail traders were fighting a battle they could never win. They were armed with advanced AI; you had a free charting app and YouTube videos.

Their AI algorithms could: 

• Instantly process real-time market data
• Predict retail trader behavior
• Coordinate trades across multiple markets
• Adjust positions dynamically
• Learn and improve with every trade

Jane Street operated with private, granular data about order flows—information retail traders could never access.

SEBI only caught wind on Jane Street in April 2024. After months of investigation and warnings, SEBI finally stepped in July 2025, imposing an interim ban and freezing ₹4,843 crore of their funds.

Here's the full timeline:

• April 2024: Media reports exposed Jane Street’s legal dispute; SEBI launched an investigation.
• July 2024: SEBI asked NSE to investigate Jane Street’s trading.
• August 2024: Jane Street gave generic explanations for their trades.
• October 2024: SEBI made policy changes—but took no direct action.
• February 2025: SEBI issued a clear warning; Jane Street promised to comply.
• May 2025: Despite warnings, Jane Street continued manipulative trading.
• July 2025: SEBI imposed an interim ban and froze ₹4,843 crores. However, eighteen days after the ban, SEBI has permitted the New York-based proprietary trading firm to resume operations. 

Ironically, today (July 21, 2025), after depositing ₹4,843 crore ($567 million) in escrow, SEBI lifts the interim ban. Jane Street may resume trading without engaging in options until further clarity and under close watch. Exchanges are on high alert.

Jane Street might be fighting to get back into India, but the young lives, the mental health, the family trust that was shattered – there’s no coming back.

Structural flaws in F&O

Here's the brutal truth: F&O trading is a zero-sum game. When Jane Street made ₹36,500 crore, you lost ₹1.8 lakh crore. It’s not a coincidence; it’s a mathematical reality. India’s derivatives market, with its weekly expiries, was less like investing and more like a high-stakes lottery.

India’s derivatives market is riddled with structural flaws that make it highly risky for retail participants. Weekly expiries have effectively turned investing into a game of chance, resembling more of a lottery than a strategic financial tool. Alarmingly, data shows that 93% of traders consistently lose money, highlighting the imbalance in the system.

What’s even more concerning is that a single firm, armed with advanced technology and deep pockets, has the ability to manipulate the entire market—raising serious questions about fairness, transparency, and investor protection.

Wrap Up

Jane Street extracted ₹36,500 crores without creating a single job, building a single product, or adding any value to India. They simply transferred wealth from the pockets of India’s youth into their own.
 

This story needs to be told, so you understand what really happened and how a foreign firm turned the dreams of young Indians into its personal profit strategy.
 

F&O trading is a zero-sum game—your loss is someone else’s gain.
 

If you’re a retail trader, here’s the takeaway: F&O is a trap, not a trade. Think twice before betting your savings in a playground rigged for the powerful. Instead, focus on genuine, long-term investing, build wealth steadily, and protect your financial future.