The fallout from Sebi’s bombshell market manipulation case against US trading giant Jane Street has sent shockwaves through India’s derivatives ecosystem, with NSE index options premium turnover plummeting by over a third as the world’s largest derivatives exchange grapples with the absence of one of its biggest players.
On Thursday’s weekly expiry, NSE options premium turnover stood at just Rs 39,625.77 crore on June 17, recording a 35% decline from June’s average expiry day turnover of Rs 60,605 crore, exchange data revealed.
Expiry day turnover has been in relentless decline this month: from Rs 61,511 crore on July 3 expiry, volumes crashed to Rs 45,884 crore last week before tumbling below the critical Rs 40,000 crore mark in the latest trading session.
The crisis erupted after Sebi banned high-frequency trading behemoth Jane Street from Indian markets earlier this month in a market manipulation case that exposed the stunning scale of the firm’s operations.
Sebi’s investigation revealed that Jane Street was “consistently running what appeared to be by far the largest risks in ‘cash equivalent’ terms in F&O, particularly on index option expiry days.” The regulator’s findings were damning: “what sets apart the trading pattern of the JS Group as prima facie being manipulative, is the intensity and sheer scale of their intervention in the underlying component stock and futures markets.”
