Why Jane Street Was a Target in India’s Option Trading Crackdown

India has gone from being a small player in the highly speculative equity derivatives market to the world’s largest, all within just five years. Daily turnover in the market now sits at around $3 trillion.

Demand for so-called equity options in particular has exploded as large numbers of relatively inexperienced retail investors came in search of quick returns. There are concerns that some large market participants have been using sophisticated technology to manipulate the system to their advantage. A study by the Securities and Exchange Board of India found that retail investors lost more than $20 billion on option trades over three years.