At least ten other large high-frequency traders (HFTs), including Millennium Management, Jump Trading, Graviton and Alphagrep, have been probed by Indian regulators for their alleged manipulative strategies in India's derivatives market, said people with direct knowledge of the matter.
The National Stock Exchange (NSE) conducted these probes along with the investigation into Jane Street and submitted a report to market regulator, the Securities and Exchange Board of India (Sebi), in February–March this year, people cited added. The development assumes significance as Sebi has cracked down on Jane Street for its India trades, imposing an interim disgorgement of Rs 4,840 crore.
These investigations were centered around some of the Futures and Options (F&O) trades made by these firms in the options segment, especially in Nifty Options. The large bouts of volatility experienced by the Indian F&O market in the run-up to the expiry of contracts had prompted the regulators to analyse the trading patterns of top F&O traders in the country.
All the 10–12 entities had adopted a similar modus operandi as Jane Street in Indian derivative markets; however, their positions were not as massive as Jane Street, said one of the persons cited above.
In February, at least two of the HFT firms from the above list received warning letters from NSE. These warnings pertained to some of the trading strategies that these HFTs were using.
Moneycontrol could not ascertain if the regulators have initiated any further action against these entities. Unlike the Jane Street case, the other probes may not come into the public domain that quickly, people cited above said.
Sebi issued an interim ex parte order in the Jane Street case, essentially skipping a full investigation for now and relying on prima facie evidence. Jane Street's massive positions in the market justified the extraordinary intervention by Sebi. But a regular Sebi investigation takes anywhere between one and three years to conclude, said a person cited.
NSE, as a stock exchange, is the first-level regulator for market participants, including trading members and brokers. Stock exchanges are even empowered to put trading restrictions or impose penalties on any trading members who violate market rules.
A key aspect of all these traders is that they all use sophisticated algorithms to strategise and even execute the trades. Domestic entities are required to obtain prior approval for deploying algos in the Indian market, as per Sebi rules. However, when it comes to offshore entities, there are ambiguities since the actual algos may have been residing and operating from outside Indian jurisdiction.
Even in the case of Jane Street, the regulator did not initiate a probe right away, said the second person cited above.
Jane Street moved the Securities Appellate Tribunal (SAT) on Wednesday, asking Sebi to provide full inspection of documents. Initially, NSE had issued a warning letter to Jane Street in February this year. There has been a flip-flop in Sebi’s stance in the Jane Street matter. Initially, the surveillance unit of Sebi did not act right away following NSE’s warning. Jane Street had also asked for guidance from NSE regarding the trades that concerned the exchange, said the second person cited above.
Emails sent to Sebi, NSE, Millennium Management, Jump Securities, Alpha Grep and Graviton remained unanswered.
In July 2025, Sebi issued an interim order against Jane Street for alleged manipulation of Indian stock market indices, which included building large long positions in index stocks and short positions in options. This order sought to impound Rs 4,840 crore in alleged illegal gains made by Jane Street and had barred the firm from trading in India until these illegal gains were deposited with the regulator. Within two weeks, Jane Street deposited the money, because of which the ban imposed by Sebi has been revoked for now. The case awaits final Sebi orders.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
