Sebi action will be driven by the fact that the popularity of Sensex options had soared in the past two financial years. The regulator has so far focused on 21 instances of Jane Street trades in Bank Nifty and Nifty weekly options from January 2023 to March 2025.

Jane Street's regulatory woes may have just begun: Sebi lens is now on Sensex options

Sebi Widens Jane Street Probe to Include Sensex Options

The Securities and Exchange Board of India's (Sebi) investigation into alleged index manipulation by Jane Street is expanding. Sources indicate the probe will now include Sensex options contracts, a market segment that has seen significant growth over the past two fiscal years.

Sebi's July 3rd interim order initially focused on 21 instances of Jane Street trades on Bank Nifty and Nifty weekly options (now discontinued) between January 1st, 2023, and March 31st, 2025. The regulator alleges Jane Street made illicit profits of ₹4,844 crore from these trades, primarily at the expense of individual investors.

"The ongoing investigation won't be limited to NSE indices," revealed a source speaking on condition of anonymity. "It will encompass Sensex options, whose popularity surged in the past two financial years."

Another anonymous source confirmed this expansion, stating, "Sensex options have gained market share recently, and any potential manipulation by the JS Group in this market won't be overlooked."

Between January 2023 and March 2025, Jane Street's total profit from trading index stocks, derivatives, and the cash market reached ₹36,502.12 crore. Sebi has already ordered the seizure of ₹4,844 crore, pending the completion of its investigation. Jane Street is expected to respond to Sebi's order shortly.

Queries sent to Sebi and BSE regarding the investigation remained unanswered at press time.

While Nifty and Bank Nifty dominated the options market, Sensex held the third position, followed by Finnifty and Midcap Nifty. In November 2023, NSE held a 96.9% market share in equity options based on premium turnover, with BSE holding the remainder. However, BSE's share briefly climbed to 20.6% in May 2024.

The Jane Street controversy has negatively impacted investor sentiment, with BSE shares falling 2.3% to ₹2,466.30 on Thursday, now hovering near bear market territory after an 18.6% drop from its 52-week high.

Rajesh Palviya, SVP (derivatives & technical head of research) at Axis Securities, commented on the potential for further regulatory changes: "There's a possibility of revising the index options expiry schedule to fortnightly from the current bi-weekly, which is contributing to the negative sentiment reflected in BSE's share price. The Jane Street impact will likely persist."

Currently, Nifty options expire on Thursdays, and Sensex options expire on Tuesdays.

Sebi previously tightened regulations on index options in October to curb excessive retail participation and mitigate losses for small investors. These changes included reducing weekly expiries to one per exchange and increasing contract lot sizes.