You’ve got to hand it to SEBI for going after Jane Street. If the allegations are true, it’s blatant market manipulation.

The shocking part? They kept at it even after receiving warnings from the exchanges. Maybe this is what happens when you’re used to the lenient U.S. regulatory regime. Think about the structure of U.S. markets: dark pools, payment for order flow, and other loopholes that allow hedge funds to make billions off retail investors. None of these practices would be allowed in India, thanks to our regulators.

That said, there’s a flip side. Prop trading firms like Jane Street account for nearly 50% of options trading volumes. If they pull back— which seems likely —retail activity (~35%) could take a hit too. So this could be bad news for both exchanges and brokers.

The next few days will be telling. F&O volumes might reveal just how reliant we are on these prop giants. I’ll share more data as and when anything interesting turns up.

By the way, this is the summary from ChatGPT if you are unaware of the issue.

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