Why Jane Street Got Banned in India and How They Made So Much Money They Thought It was Illegal

Options are popular in US. But even more popular in India

Many people in India look to get rich quickly with options. The option market in India is more liquid than the stock market itself.

This is where Jane Street found an opportunity.

Here's how they made an ungodly amount of money (which got them banned in India)

1. They buy 0DTE options (date to expiry) on the index

2. While the options are liquid, the underlying indexes are less liquid and the stocks are even more illiquid

3. They then use more capital to buy the underlying stocks (e.g. India bank stocks which are not liquid) and boosting the share price up

4. This leads to an increase in share price for the index as well

5. Effectively, putting their 0DTE options into money and providing Jane Street with huge sums of return

In other words, they are able to manipulate the closing price of each day by buying large sums of the underlying stocks within the index because the stocks itself are not liquid in India.

By combining with 100x leverage using 0DTE options, the traders at Jane Street made a lot of money.

Ultimately, Jane Street got banned for being too profitable.

Cheers,

Eric

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Eric Seto

Chartered Professional Accountant (CPA)

Chartered Investment Manager (CIM)

Founder of 5MinInvesting.com

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