The capital markets regulator’s investigation into alleged index manipulation by Jane Street will extend to the Sensex options contracts as well, according to two persons aware of the matter. These contracts have gained traction over the past two fiscal years.
So far, the Securities and Exchange Board of India’s (Sebi) interim order of 3 July has focused on 21 instances of Jane Street trades on the highly liquid but now-discontinued Bank Nifty weekly options and the Nifty weekly options between 1 January 2023 and 31 March 2025. The firm allegedly made illegal gains of ₹4,844 crore in these trades, largely at the expense of individual investors, according to Sebi.
“The investigation is ongoing and would not be limited to the NSE indices, but would also include the Sensex options, whose popularity soared in the past two financial years,” said one of the persons cited earlier, speaking on the condition of anonymity.
According to the second person, who also didn’t want to be identified, “Sensex options have gained market share in recent years and by that token, trades here too would not escape regulatory attention for any possible instances of manipulation by the JS Group.”
From January 2023 to March 2025, Jane Street group’s total profit from trading index stocks and derivatives, and cash market was ₹36,502.12 crore. Sebi has ordered the seizure of ₹4,844 crore of the total so far even as its investigation into alleged manipulation continues. Jane Street is expected to respond to Sebi’s order in the coming days.
Queries emailed to Sebi on its investigation into Jane Street’s trading patterns on Sensex options remained unanswered until press time. BSE Ltd declined to comment.
While Nifty and Bank Nifty enjoyed huge popularity among options traders, including individuals and proprietary participants, the Sensex was the third most popular options index, distantly followed by Finnifty and Midcap Nifty.
To offer context, the market share of NSE in equity options based on premium turnover stood at 96.9% as of November 2023, with BSE options accounting for the rest, according to exchange data. As recently as May this year, BSE had eaten into NSE’s share, garnering 20.6% of the options market, with its larger rival holding 79.4%.
However, with the likelihood of a further clampdown by Sebi in light of the Jane Street fiasco, sentiment has taken a beating with BSE shares falling 2.3% to ₹2,466.30 on Thursday. With this, the BSE stock is hovering around a bearish market, having plunged 18.6% from a 52-week high of ₹3,030 on 10 June to date. NSE is unlisted.
A 5-10% fall from a high is a pullback; a 10-20% decline is a correction; and a stock or an index enters the bear market after plunging more than 20% from a peak.
“There is a likelihood of a revision in expiry schedule of index options to one fortnightly index expiry from two weekly expiries currently, which is dampening sentiment as reflected in the fall of the BSE share,” said Rajesh Palviya, SVP (derivatives &technical head of research) at Axis Securities. “The Jane Street impact is likely to continue with the ongoing investigation.”
Currently, Nifty options expire on Thursday and Sensex options on Tuesday.
Sebi had clamped down on the index options segment last October to rein in retail frenzy, which was resulting in outsized losses for small individual investors.
Among the key changes were reducing the number of weekly expiries to one per exchange, effective November last year; and increasing the contract lot size to ₹15-20 lakh from ₹5-10 lakh from December-January.
