| July 07, 2025 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| Observations & Insight | | | My friend and industry colleague Dax Rodriguez wanted me to know that DNA Brokerage LLC ("DNA"), a CFTC and NFA member based in Chicago, has launched its affiliate FINRA broker-dealer, DNA Securities LLC, to expand its services to include securities trading in addition to its existing futures offerings for institutional clients. This development enables DNA to offer clients access to both U.S. securities and futures markets, including products such as VIX Futures, E-mini S&P Futures, and SPX Options, as well as support for hedging fixed-income portfolios. According to Jacques Fernandes, president of parent company Strands Holdings US Inc., the expansion is a response to client demand for broader cross-market and product access. DNA began offering futures brokerage services in August 2024 and has since added clearing relationships to meet the needs of its global client base. ~JJL
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| | | Lead Stories | | | Why Regulators Are Cracking Down on India's Giant Options Market
Chiranjivi Chakraborty and Ashutosh Joshi - Bloomberg
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 - which includes options trading - now sits at about $3 trillion. The markets regulator has become increasingly concerned about this segment of the market, particularly because of its sudden popularity among inexperienced retail investors chasing quick returns. It has previously warned that these traders could face significant losses when bets go wrong, particularly against larger financial market players. There are also concerns that some big-sized participants, through the use of sophisticated technology, are using "manipulative" practices to game the system, affecting the integrity of the market.
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***** It turns out Jane Street was a one-way street to profitability, until it was hit by a SEBI.~JJL
Why Jane Street Was a Target in India's Option Trading Crackdown
Chiranjivi Chakraborty and Ashutosh Joshi - Bloomberg
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.
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Indian Retail Traders Lose $12 Billion Trading Equity Options
Chiranjivi Chakraborty - Bloomberg
Individuals in India lost over 1 trillion rupees ($12.2 billion) during the year ended March, trading equity derivatives in the world's top destination for such products, according to a study by the country's securities regulator.
Nine out of 10 mom-and-pop investors suffered losses, the study published on Monday by the Securities and Exchange Board of India found. Retail investors had lost 748.12 billion rupees in the financial year ended March 2024, the study showed.
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The details of Jane Street's alleged 'sinister scheme' in India; A sticky wicket
Robin Wigglesworth - Financial Times
The big news this morning is that India's financial regulator has banned Jane Street from the country's markets for a "sinister scheme" to manipulate Indian stocks and derivatives. The Securities and Exchange Board of India allege that the US trading firm made $550mn of illegal gains from these strategies, which it is now wants back before the ban will be lifted. As MainFT reported: The Securities and Exchange Board of India said its decision to limit Jane Street's access to India's securities markets stemmed from a months-long investigation. "JS Group was undertaking an intentional, well planned, and sinister scheme and artifice to manipulate cash & futures markets and hence manipulate the BANKNIFTY [Indian bank stocks] index level, to entice small investors to trade at unfavourable and misleading prices, and to the advantage of the JS Group," the regulator said in its interim order.
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The Secret Behind Jane Street's India Trades That Made Billions
Chiranjivi Chakraborty and Cecile Vannucci - Bloomberg
From Amsterdam to Hong Kong and New York, it had become the talk of the town: A unique derivatives strategy fabulously profitable in India. Those trades now are the very reason why Jane Street Group LLC has been temporarily banned from India's securities market. The nation's regulator alleged "egregious" market manipulation in a 105-page interim order posted on its website Friday. Jane Street, a global quant trading firm, disputed the findings. The regulator said that on weekly index options expiration days, Jane Street used a large amount of funds to influence price action in futures and the cash market - where volumes are relatively low. That allowed it "to put on significantly larger and profitable positions in the highly liquid index options market by misleading and enticing a large number of smaller individual traders," according to the Securities and Exchange Board of India.
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The Great Bitcoin Power Shift Has Large Holders Dumping 500,000 Coins
Olga Kharif - Bloomberg
A silent transfer of control is reshaping the $2.1 trillion Bitcoin market. A steady stream of sales by long-time whales - miners, offshore funds and anonymous wallets - is being met almost one-for-one by demand from institutional players like ETFs, corporates and asset managers. The result: Bitcoin is struggling to break out of its record high around $110,000, volatility is evaporating, and its place in the investment landscape is being reshaped. Despite a flurry of bullish headlines - from corporate treasuries embracing Bitcoin to the Trump administration's full-throated crypto endorsement - the largest digital currency has remained stuck in its trading range for months. Underneath the surface, long-dormant whales have been trimming positions just as institutions ramp up their buying. And this switchover is gradually recasting Bitcoin's identity from a high-octane trade to a slow-burn allocation.
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Derivatives players divided over 24/7 trading; For some, round-the-clock markets are inevitable. Others see "enormous risks"
Luke Clancy - Risk.net
The debate over 24/7 trading is dividing the derivatives industry in two. One camp, largely represented by crypto enthusiasts, sees continuous markets as both inevitable and risk-reducing. Its opponents, mainly traditional derivatives market participants, want to draw the line for round-the-clock trading at digital assets. "I don't think it is clear yet how operations in a 24/7 market could
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| | | Exchanges | | | The class action lawsuit on behalf of certain Class B shareholders of CME Group, Inc. and certain Class B members of its subsidiary, The Board of Trade of the City of Chicago, Inc., is scheduled to begin trial before Judge Patrick J. Sherlock on July 7, 2025, at the Richard J. Daley Center, 50 W. Washington Street, Chicago, Illinois, in the courtroom on the 20th floor. The trial proceedings are open to the public starting Tuesday, July 8, 2025, when opening statements are scheduled to begin, with daily start times typically between 9:30 and 10:30 am, though Fridays may start earlier. Seating in both the main courtroom and any overflow room will be available on a first-come, first-served basis, and attendees are asked to turn off cell phones and remain quiet and respectful to avoid disruptions. For those wishing to observe remotely, the Court will open its Zoom session at the beginning of each day, starting July 8, 2025, and will admit observers only at that time. Observers must keep their cameras and audio off throughout the proceedings. The Zoom meeting ID is 994 2739 7392 and the password is 2007. ~JJL
Old-School Floor Traders Finally Get Their Day in Court Against CME; Trial to open in the Chicago plaintiffs' long-running lawsuit claiming harm from the launch of electronic markets
Alexander Osipovich - The Wall Street Journal
Thousands of jostling traders once packed the floors of Chicago's futures exchanges, before the advent of high-speed computerized trading turned them into relics of a bygone era. Now, some of them will finally have their day in court. On Monday, a trial is set to begin in a long-running class-action lawsuit filed by traders who say that exchange giant CME Group duped them out of the privileges they held as members of the city's once-elite community of floor traders.
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Cboe's Trailblazing Female Options Leaders Talk With Benzinga About Success In The Financial Industry
Meg Flippin - Benzinga
In a recent interview with Benzinga, Cathy Clay, Executive Vice President and Global Head of Derivatives at Cboe, Meaghan Dugan, Senior Vice President, Head of U.S. Options at Cboe and Alexandra Szakats, Vice President, Head of The Options Institute at Cboe, discussed their experiences being leaders in the options industry and their advice on how to succeed in the fast-paced, ever-evolving derivatives markets. When Clay and Dugan started out, there were 12 women out of 550 available seats on the trading floor. Instead of being intimidated, Clay said she saw it as a strength, something that has stayed with her throughout her career.
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U.S. Cash Equities June Highlights
Cboe
June Highlights
Average Daily Volume (ADV) during Cboe Early Trading Hours (4-7 a.m.) was 379 million shares, 41% of total ADV (between 4 - 7 a.m.)
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| | | Regulation & Enforcement | | | SEBI Bars US Trading Firm Jane Street; Demands To Remove Unlawful Gains Of 4,843.57 Crore For Manipulating Index Levels On Expiry Days For Profit
The Free Press Journal
JSI Investments, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading of Jane Street Group (JS Group) have been prohibited from the markets. According to an interim order passed by Sebi on Thursday, JS Group entities made over Rs 43,289 crore in profits from index options on NSE from January 1, 2023, to March 31, 2025, across all product categories of NSE. Markets regulator Sebi has barred US-based trading firm Jane Street from the securities markets and directed the company to disgorge unlawful gains of Rs 4,843.57 crore for allegedly manipulating index levels on expiry days to gain massive profits in index options. JSI Investments, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading of Jane Street Group (JS Group) have been prohibited from the markets.
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How Jane Street Group drove illegal profits: Expert decodes SEBI's Rs 4,843 crore chase
Dailymotion.com
In a major development, the Securities and Exchange Board of India (SEBI) has passed an interim order against the Jane Street Group, to impound Rs 4,843.57 crore of illegal gains by manipulating the securities market, particularly on expiry days of Bank Nifty options. ANI spoke with various experts to decode the trading strategy adopted by JS group to make undue and illegal profit from market movements at the cost of retail investors. Speaking to ANI, Uttam Bagri, Managing Director of BCB Brokerage, explained that Jane Street followed a strategy that misused the connection between the cash and derivatives segments. "What they did was, in the cash segment, they kept taking strong long positions. At the same time, in the derivatives segment, they were going short, with a much larger position," Bagri said.
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Analysis-US SEC's guidance is first step toward rules governing crypto ETFs
Suzanne McGee - Reuters
New U.S. Securities and Exchange Commission guidance on disclosure requirements for exchange-traded products tied to cryptocurrencies marked the first step toward approval of dozens of applications for ETFs linked to everything from Solana and XRP to President Donald Trump's eponymous meme coin. The guidance, issued last Tuesday, signaled a dramatic shift by Republican leadership in how the top U.S. markets regulator deals with the crypto sector. The SEC has launched a task force to draft new regulations, refocused its crypto enforcement team and paused or altogether walked away from high-profile enforcement cases that many thought the agency was winning.
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| | | Technology | | | Sterling Trading Tech wins Best Listed Derivatives Trading Platform in APAC; Recognized at the A-Team Capital Markets Technology Awards APAC 2025
Sterling Trading Tech (Sterling), a leading provider of professional trading technology solutions, today announced that its trading platform has been named Best Listed Derivatives Trading Platform in the 2025 A-Team Capital Markets Technology Awards APAC. The award recognizes Sterling's continued innovation in listed derivatives technology, with a focus on equities and options. Designed to meet the demands of fast-moving markets, Sterling's trading platforms deliver the speed, flexibility, and control required by institutional and professional traders across the APAC region.
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Australian Securities Exchange, Tokyo Stock Exchange and Fujitsu collaborate on RFQ platform; The offering is expected to bring innovation in electronic trading and support the development of the Australian ETF market.
Natasha Cocksedge - The Trade
The Australian Securities Exchange (ASX) has partnered with the Tokyo Stock Exchange (TSE) and Fujitsu to deliver a SaaS request for quote (RFQ) platform for Australia's ETF market. Through the collaboration, a memorandum of understanding (MOU) has been signed, and Fujitsu is set to develop the platform based on TSE's CONNEQTOR system which has assisted more than 290 users in reducing costs and enhancing ETF trading operation efficiency since its launch in February 2021. The offering is expected to bring innovation in electronic trading and support the development of the Australian ETF market.
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| | | Strategy | | | Investors piled into non-US ETFs at the second-fastest pace ever in June. These are the 2 types of funds they're buying most.
William Edwards - Business Insider
The rise in "sell America" chatter this year seems to have been matched by investor appetite for non-US stocks.
Flows into non-US exchange-traded funds hit more than $20 billion in June, the second-highest monthly amount ever, according to data from State Street.
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3 Unconventional Tips for Beginner Traders
tastylive (Video)
In today's Skinny on Options: Abstract Applications, Dr. Jim emphasizes the importance of understanding options trading fundamentals, advocating for beginners to start by understanding long options to grasp basic concepts before exploring the other side of the contract - the short side. He highlights three key drivers of options P&L: direction (delta), time (theta), and volatility (vega), arguing that new traders should dissect how these factors affect their trades. He advises starting with vertical spreads exclusively, as they provide traders with defined risk exposure to the markets.
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| | | Miscellaneous | | | Jane Street's Indian Options Trade Was Too Good (Opinion)
Matt Levine - Bloomberg
Last year, Jane Street Group sued Millennium Management for allegedly stealing its secret trade ideas. Jane Street had employed a couple of traders who discovered a trading strategy in the [redacted] market. Jane Street did some initial testing and found results that were "counterintuitive, unexpected, and initially met with significant skepticism and incredulity internally at Jane Street": It made so much money that everyone thought it was a mistake. Jane Street started running the strategy in the [redacted] market and made a lot of money. Eventually the traders left for Millennium, and then Millennium allegedly started running the same strategy, eating into Jane Street's incredible profits.
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| | | | John Lothian News (JLN) is the news division of John J. Lothian & Company, Inc. (JJLCO). The online media and financial services firm is staffed by derivatives industry, journalism and technology professionals. | | | | | | | John Lothian News Editorial Staff: | | | John Lothian
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