 "Jane Street, market infrastructure institutions, Brokerages, Sebi, Markets, The Smart Investor")
Last month the regulator had caught Jane Street, a high-frequency trading firm, allegedly influencing the market. It may seem like a regulatory triumph, but in truth, it laid bare deep structural flaws at the heart of India’s derivatives market after years of breakneck growth.
For one, the indices used to trade in futures and options (F&O) are flawed. Two, policymakers’ claim that the derivatives market enables efficient price discovery, improves market liquidity, and permits investors to manage risk, on the basis of the massive volumes it generates, is not entirely correct. The gigantic volumes in index derivatives are limited to
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