Unhedged The secret giant of finance
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Jul 11, 2025 In this episode, Robin Wigglesworth, Editor of FT Alphaville and finance expert, joins to explore the controversies surrounding Jane Street, one of the world’s largest traders, accused of market manipulation in India. The conversation examines the evolution of trading firms and their ethical dilemmas in the fast-paced finance landscape. With a mix of humor, they also share personal anecdotes and tackle bizarre financial tales, including amusing stories about bedbugs and penguins, while critiquing investment challenges in cryptocurrency.
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Jane Street's Market Power and Scandal
- Jane Street is a massive market-making trading firm, largely algorithmic but with skilled human traders.
- It has grown hugely, making more trading revenue than major banks, but is now accused of market manipulation in India.
India's Huge Derivatives Opportunity
- The Indian derivatives market, especially options, is extremely large and volatile.
- Jane Street allegedly exploited pricing mismatches between illiquid stocks and large derivatives positions to profit massively.
Market Manipulation or Arbitrage?
- What looks like market manipulation can be a gray area with overlapping views.
- Jane Street claims their actions were simply index arbitrage, arbitraging prices between stocks and options to align market prices.