American Company Jane Street Banned by SEBI  : Know details of the Case…

Recently American Company Jane Street Banned by SEBI for operating in to india so let’s see whole issue in detail.

you’ve likely seen many people on social media and YouTube giving stock market tips, claiming to help you get rich.

But have you ever wondered—if they truly know how to profit from the market, why aren’t they billionaires themselves? Why do they spend time advising you instead? Many of them shoot videos from rooftops or under trees, lacking any sign of true success.

So where is this so-called knowledge coming from? If a tip is viewed by millions, do all those people make money? No.

Today, I’ll explain how such tips mislead retail investors and benefit big players.

What is the case about American Company Jane Street ?

• Now this has come in the latest report of SEBI. They have banned the largest quantum trading company in America from operating in India.
• In two years, they have withdrawn about 43,000 crores from the retail investors in India’s option market through their trading practise.
• And in total, they have earned 36,000 crores and taken it abroad from India.
• That is why the money is yours. You have to think and operate.
• We will discuss what is the whole story of the ban that SEBI has put on this big company.

What is this whole scam about American company Jane Street ?

• What we are discussing with you today is how this big company has put 43,300 crores of retail investors in option trading.
• I would say that they took it out of their pockets through manipulated trade practises and took it out of the country.
• This company was formed in 2000. Its name is Jane Street.
• J-A-N-E, Jane Street. It is in New York City. It has offices in New York, London, Hong Kong, Amsterdam and Singapore.
• There are more than 2000 employees. And they only play with their money, not with the money of the client. That means they put all their earnings in the pocket of the owner of this company.
• And let me tell you a data. All the employees of this company got a salary of more than 1 million dollars last time. I was reading this somewhere when I was researching what this company is and how it works.
• They give more than 1 million dollars to their staff.
• Now you understand how much money they earn and from where they earn .

what is the method of American Company Jane Street in Stock Exchange?

• Jane Street specialises in market making.
• Providing liquidity across a wide range of assets. ETF, equity, bond, crypto, etc. This is involved in market making.

How American Company Jane Street  run in the market ?

• They do funding and than Arbitrage and quantitative trading.
• Exploiting price inefficiencies using algorithmic strategies. This is what they used in India and took advantage of it in the Indian stock market.
• Building their own trading systems, infrastructure and research tools.
• Now they know how and when to play and in which market Because  when thousands of people do trading and if you understand its pattern, then you will understand a lot of things.
• This is data analytics in a way. And if you refine it further, then this is artificial intelligence. This is the artificial intelligence ecosystem of the stock market.
• And they understand how to mislead traders, especially retail traders. How to trap them. This is their specialisation.

How do American Company Jane Street worked in India india?

• When the market closes in the evening, there is a game from 3 to 3.30 pm.
• They play this big game for a day in a month. And on the same day, the whole scam is coming in front of you.
• American Company Jane Street show the market that the market is increasing.
• This is a game. And suddenly the market changes direction. And the profit of these people increases many times ,This is a small game.
• After 15 minutes, the market moves in one direction for the first 15 minutes. Then in the second 15 minutes, the market moves in the other direction.
• And in the game of billions of dollars disappears. This is the game of big fish. And a small person gets trapped in this.
• First the market is picked up, then it is dropped. According to American Company Jane Street ‘s direction, where they have their positions, if they take the market that way, then they profit.

Now what are the weaknesses in the market that American Company Jane Street exploit?

• High retail participation, retail option buying created predictable flow.
• All the people who tell you on social media that you should do option trading, you should do option trading, they take advantage of this, Because the retail trader does not understand. They come to the market for gambling.
• American Company Jane Street exploit the same formula of gambling ” Low liquidity in cash and future.”
• When you do not have the depth of the market, In India, most of the trading is happening in options, which has no value at all.
• Friends, if you want to earn money, the way is very simple. You buy stocks in good stocks.
• And after dematting it, keep it in your account. As the company progresses in business, your asset value will increase.
• If you want to become rich overnight, you cannot become rich overnight.

Now What will American Company Jane Street say in this entire game?

• They will say that we are following the guidelines of SEBI. We have not done any manipulation on purpose. If it happens, it happens.
• We are not manipulating the market on purpose. We are not buying and selling shares. They are independent units.
• They are different people. They buy and sell. No one knows if they are operating like a cartel or not.
• As the investigation progresses, we will get to know. The methodology of SEBI is how to calculate loss and profit. This is trading gain and loss.

Jane Street will say ,How can you call this profit?

• This is the game of trading. That is why you should look at it.
• If you have market inefficiencies, what is our fault in that?
• If your law is bad and there is no depth in your market, then what should we do in that?
• If your law is such that people do not want to deal in cash, instead of demand, they always want to trade options, then what should we do in this?

That is why the government should look at what is the reason that people are not investing properly and are going towards options.

Is it the issue of taxes? Or is it the issue of some other profit?

• What is the reason that people are investing in greed You have to understand this.
• And disproportionate punishment because the government, SEBI has frozen around 4900 crores in their bank accounts.
• And has said that no bank will release their money until the investigations are completed.

And they have said that you are giving more punishments. SEBI has put an interim ban and has seized their money. There is a report of 105 pages.

Why American Company Jane Street must be held guilty ?

• Disproportionate profit indicative of distortion.
• In a special way, from January 2023 to March 25, they did this fraud.
• In total, they earned a profit of 43,300 crores in the option.
• Net profit was 36,500.
• The difference is, you can say that , to manipulate the option market, when they invested in the physical or cash market, or in the futures market, the loss they had there, and it will happen, you made a loss of 10 rupees and earned a profit of 100 rupees. They played this game.
• So this difference of 5000-6000 crores, this is the same game for which they manipulated the market.
• And they were given a warning in February, by the National Stock Exchange, that the way you are doing it, this is not right. You improve it.

How did American Company Jane Street’s step-by-step operation happen?

• Like above mentioned , first take the market up, and then bring it down fast, so that you can benefit.
• This means, build large option positions prior to expiry. Before expiry, in the last half an hour, take a lot of positions out of money.
• Out of money means out of range.
• If we look at the stock market graph, it is of 22000. What positions did I take? I took either 10 points down, or 10-15 points up.
• This is how they took the position. They took the position down, first brought the market up, attracted people. People thought that the market was growing fast.
• A lot of people invested. As soon as a lot of money came in, they reversed the market.
• Now how did they reverse it? In the index, the shares that are important, the shares that they had already bought, they started selling them back.
• Suddenly, there was a panic in the market.
• The index fell, and as soon as the index reached their level, the difference that they had, look at this, this got added to the profit. The ways to play the market, we have to understand.
• As above said , manipulate index in the last 30 minutes, at the closing window time, because there is so much panic at that time, that a person does not have time to stop.
• Whatever settlement has to happen, has to happen today. If we do the same closing window for 2 days, if the window is split, people will stop and see that they will wait a little, how long will the market take this fluctuation.
• And once the market stabilises, then we will take the position to enter or exit.
• But the game that happens in the last 30 minutes.
• That’s why, they do artificial movement in index, and favourable to their option positions.
• They Buy or sell heavyweight shares, by which the index will move, and in the direction in which they want to close the index, according to that, they buy and sell those shares in the futures or cash market. And this is called marking the close.
• Now they know how far we have to take the market. Now you understand that a big company which has 500-7000 crores, can change the direction of the entire market. This means that the Indian market is not very deep yet.
• Because only 1-2 companies move the market up and down. This is a very dangerous situation. And especially in options.
• So that’s why, until there is no depth in the market, you come out of the options.

I request you to save your money, and stop option trading. You have to earn money.

Whatever you have earned, buy it from good companies, blue chip companies, or invest in ETF. ETF gives very good returns. Invest in it, and forget about it for 5 years.

Don’t gamble every day, you will be ruined.

Similarly, cause index to close at pre-targeted level, they change the direction of the index according to their own will. And take the index where they want.

And even 5-10 points more in Bank Nifty could result in crores of profit.

Because when you are talking about a contract,

For example; suppose I bought a share of 5000 crores. Now how much money do I have to give in 5000 crores? Suppose there is a 1% fluctuation in it.

Even if there is a 1% fluctuation, it becomes 50 crores. And if we are talking about derivatives, you don’t have to invest 5000 crores, you just have to take a position. And in that, suppose you get a cost of hardly 2-5%.

If you invest 5% and earn 0.5%, then think about how big the amount is.

When they take a position in the beginning, it is out of money. And as soon as the index comes in their direction, the level at which they want it to close, then it becomes in the money. It means it comes in the range.

And as soon as it comes in the range, the first options they were buying, at a lower rate or a higher rate, depending on the strategy, they sell it.

Or they wait for settlement because now we have suppressed the market. Now as soon as the market closes here, their gain comes in their account.

So this is played very smartly.

What does SEBI say about legal and regulatory business?

• you have done fraudulent and unfair trade practises. This is their issue.
• Distortion of price discovery process. You deliberately distorted it. Loss to counterparties and retail traders.
• This happened, that’s why you have earned. And failure to follow fair and transparent market practises.
• Now the question is, how does this happen?
• And that’s why, if you look at an example, what did they earn in one day? They earned 735 crores in one day.
• In one day. This is the game. This is on 17th January 2024.
• When they sold positions worth 32,000 crores, and the total profit they got, which they had bought, was a total of 735 crores.

Let me clear one more thing…

• See, from 3 to 3.30 pm, the put call was at zero. It was 11.25. The rate was 22,000.
• 22,000 to 22.50.
• 22,000 to 10.00.
• 22,000 to 15.00.
• Then again, 22,000 to 10.00. 22,000 to 15.00.
• They took the market up and brought it down. So, wherever they took their positions, they played according to that.
• Here, their put call was worth 33 crores.
• And if you look at Bank Nifty, it started at 49.00, closed at 49.60, and had a profit of about 58 crores.
• And in between, you see, the market fell. It started at 49.00, 48.975, 48.950 for 30.
• And after that, again, here, 9.60, 9.90, and 49.60. By reversing the market, here, a profit of about 58 crores.
• So, this game is played in this entire market. That’s why, the last date is expiry.

In the index market, keep in mind, the market closes at the weighted average price. And, according to the closing, how the profit calculations are done, I have given you this example. And this is the reason.

Now, they said, Sir, we haven’t done anything wrong. So, how can SEBI say this? SEBI’s statement is very clear. Because everything is digital, all the trade logs are with SEBI.

• What game did they play, which parties were involved, will be revealed at that time.
• Index movement pattern versus their positions, when they sold, when they played, and how it affected the index.
• Warning issued by NSE, in February 25, NSE said, what you are doing is not right, don’t believe this.
• Email and communications, which they must have done among themselves, within the organisation, all of them will be studied.
• Forensic audit will be done. And excessive profit, disproportionate to the risk.
• How much risk you are taking, you will get profit every time. It happens in a range, that there is a probability, that you will earn profit 60 times, and lose 40 times. But you, almost, 80%, 90% of the time, you are making profit.
• And 10 times, you are stuck on the borderline cases. This means that, this is a completely.

Final words after American Company Jane Street Banned by SEBI case explained…

•  You always keep in mind, that whenever there is a sharp trend in the market, whether down or up, stop.
• Don’t chase it.
• In any company’s stock, if there is a sudden up or down, and there is no change in its business, there is no change in the government’s policy, there is no such international development, that all of a sudden, the whole business of that company has changed. This does not happen.
• But, you are told stories, look, Trump did this, so this market will end, you exit. Or, Modi said this, this will increase this company’s share rapidly, you take it.
• In the market, there is no knee-jerk reaction.
• If any policy is made, its effect, in coming to the ground, takes at least a month to three months.
• Today, if any announcement is made, it will become dust, it will become a notification, you will have to see, the company will modify its business model according to it, it does not happen overnight, it takes time, existing business is going on, existing inventories are there, existing policies are there, it is not unwinded overnight.
• Today, look at the situation here. This company alone, has earned a profit of 43,000 crores in options. Meaning, the amount of fraud in options, 25% alone, this company has done.

Please keep this in mind. And, there will be many friends around them. Because, when a game is played, there are many other big players with them.

Now, all those white-collar criminals, will come slowly, in front of you.

Now, it depends, how seriously, moves this whole investigation forward, and brings back confidence in the market.

You can read more on this topic. Many reports can be found on the internet. You will get a complete 105-page report in CBI.

You can read it. But, The money is yours. Don’t invest in fraud.