One of the world’s leading algorithmic trading firms, XTX Markets, has shut down its India index options business after suffering an extended period of poor performance. The firm’s exit comes just as another global trading giant, Jane Street, is under investigation by the Securities and Exchange Board of India (Sebi) for alleged market manipulation.
The firm’s India strategy was once highly successful. But it collapsed suddenly between August and September 2023. The strategy earlier delivered a Sharpe ratio of 10, which measures return versus risk. But the results sharply declined and never recovered, leading XTX to exit the business in early 2025. This marks the first time in the firm's 17-year history that it exited a previously profitable market.
Jane Street firm had made outsized profits in India, which puzzled the market very much. This is because profits are typically limited by market conditions in case of high-frequency trading.
Sebi has accused Jane Street of making “unlawful gains” and disturbing market fairness through trades in Bank Nifty options. The firm has already deposited ₹4,843.5 crore in an escrow account as instructed by the regulator. Sebi’s findings include unusual market movements after two Jane Street traders exited the firm—an event Gerko also referenced.
Gerko also raised concerns about broader issues if a significant part of Jane Street’s global revenue came from illegal trades. He called on regulators around the world to look into the matter.
Read more: Jane Street Can Trade Again in India! Pays ₹4,843.5 Crore as Asked by SEBI!
XTX Markets’ exit from the Indian index options market, following poor returns and rising concerns about fairness, highlights the deep impact that alleged manipulation by one firm can have on even the most sophisticated global trading players. The matter is still under regulatory review, and its final outcome may reshape how algorithmic trading is monitored in India.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Jul 14, 2025, 4:04 PM IST
We're Live on WhatsApp! Join our channel for market insights & updates