'₹700 crore in a day': A former Goldman associate reveals Jane Street’s Bank Nifty expiry strategy

Aaditya Anand, a former Goldman Sachs associate, has laid bare the mechanics behind Jane Street’s now-infamous Bank Nifty manipulation on LinkedIn, offering a blow-by-blow account of how the U.S.-based quant firm allegedly gamed India’s derivatives market on January 17, 2024.

9:15 AM — Bank Nifty opens gap-down
Following disappointing earnings from HDFC Bank, the Bank Nifty index started the day sharply lower. Jane Street, according to Anand, began buying large volumes of index heavyweights — HDFC, ICICI, and Axis — in both the cash and futures markets, artificially pushing the index upward.

11:47 AM — The pump peaks
By late morning, the aggressive buying lifted Bank Nifty by 600 points. This surge distorted the options market: call options spiked in price while puts became unusually cheap.

Strategic Shift: Short calls, buy puts
Jane Street seized this imbalance. They reportedly sold the overpriced calls and loaded up on undervalued puts — a setup designed to profit from a sudden drop in the index.

11:49 AM — The dump begins
Just two minutes after the peak, Jane Street reversed course, dumping the same stocks they had earlier bought. This triggered a sharp decline in the index, effectively wiping out the 600-point rally. As the market sank, their puts soared and short calls turned profitable.

The Result: ₹700 crore profit in one day
While their losses in the cash and futures markets were minimal, Jane Street’s real payday came from the options. Anand estimates the firm made ₹700 crore in a single session — gains that came at the expense of retail traders caught on the wrong side of the swing.

Jane Street has since been banned by SEBI from participating in Indian markets, with the regulator calling the maneuver “manipulative and deceptive.”

Jane Street said it disputes the findings of SEBI’s interim order that barred it from participating in India’s securities market. In an emailed statement to Reuters, Jane Street said it would continue to engage with the regulator and added, “Jane Street is committed to operating in compliance with all regulations in the regions we operate around the world.”