fabian s. klinkeThe Infinite Money Glitch Breaking the Stock Market
Source: The Infinite Money Glitch Breaking The Stock Market, Hamish Hodder, 15:40, uploaded 2025-07-22.
Hamish Hodder opens with a striking ratio. In India, more than $400 of derivatives can trade for every dollar of stock that changes hands. The options market has become so large that individual traders lose about half a year’s salary whilst a proprietary trading firm has made billions from the structure. The firm is Jane Street Capital, and the strategy became public through an investigation by India’s securities regulator, SEBI.
A market built for short-term bets
India’s equity derivatives market grew during an eight-year stock-market rise. Traders who wanted larger returns moved from shares into options, which let them bet on short-term price movements without owning the underlying stock. The source says that roughly $4 trillion of equity derivatives trade each day on India’s National Stock Exchange, accounting for about 80 per cent of the world’s options bets.
SEBI found that nine out of ten individual traders in equity futures and options lost money in 2022. The average losing trader lost around 110,000 rupees, which Hodder compares with half the annual salary of a typical Indian worker. Exchanges, brokers, and the government still collect fees as the activity grows. The market therefore channels a large flow of small bets towards institutions that have more capital, more information, and better systems.
Jane Street in the background
Jane Street is a proprietary trading firm founded in 1999. It trades with its own capital rather than investing money for outside clients. That structure allows it to use aggressive and confidential strategies without the same client-protection rules that shape a hedge fund or bank.
The firm is a market maker. It buys and sells securities so that a price and counterparty remain available when another participant wants to trade. A market maker can earn a small spread on a large number of transactions. Jane Street handled more than ten per cent of US trading volume in the year discussed by the video, including around $700 billion of exchange-traded funds each month.
The source presents the firm’s 2024 results as extraordinary. Net trading revenue had doubled to around $20.5 billion, and its estimated first-quarter profit margin reached about 64 per cent. Jane Street had become large enough to rival the trading divisions of major banks whilst remaining unfamiliar to most people outside finance.
The firm’s Indian business grew after it entered the market in 2020. By 2023, the strategy had reached full scale and revenues had risen sharply. The question was how a market maker could extract so much value from a market in which most individual traders were losing.
Moving the index to price the option
SEBI’s investigation describes intraday index manipulation. Hodder uses 17 January 2024 as the example. The Bank Nifty index opened down around three per cent after HDFC reported weak results. The index combines major Indian bank stocks, so the news put pressure on the whole basket.
Jane Street then bought large positions in HDFC, ICICI, SBI, and other Bank Nifty stocks. In several of those stocks, the firm represented 20 to 25 per cent of all buying during the first hours of trade. The total position reached about $500 million. The buying supported the index even though the wider market had pushed it down.
That support changed the price of same-day put options. A put becomes more valuable when the underlying index falls. If the index appears to be stabilising, the market assigns a lower price to a bet that it will fall again before the close. Jane Street used the temporary rise to buy a large set of cheap puts.
One example begins with a put at a strike price of 46,800. It cost 229 rupees shortly after the opening, then fell through 123, 104, 82, and 65 as the bank stocks recovered. The firm’s put position was more than seven times larger than the money it had spent buying the bank stocks.
The second phase reversed the first. Jane Street sold the bank stocks it had bought, even though the sales produced a loss. The index resumed its decline, and the puts rose sharply. The option that had fallen to 65 rupees finished the day above 700. Another contract fell from 500 to 180 before closing above 1,000. The options profit outweighed the stock losses, and SEBI estimated that Jane Street made around $85 million on that day’s pattern.
The strategy depended on the unusual scale of India’s options market. Jane Street could buy a very large options position without moving the option price in the same way that its stock purchases moved the underlying shares. A smaller, unleveraged market supplied the signal that changed the value of a much larger derivatives market.
Manipulation and intent
The source says Jane Street used other methods as well, including heavy trading near the market close to influence the closing price. It places the total profit from the Indian strategy at around 570 million, which it ordered the firm to forfeit.
The legal question is not whether a firm may trade shares and options at the same time. SEBI’s objection concerned the intensity, scale, and intent of the trades. Buying a large stock position in the morning and selling it at a loss a few hours later has little independent economic logic. The pattern makes sense when the stock trades serve a second position in the options market.
The source records an update added during editing. SEBI had temporarily barred Jane Street, although a later report said that the ban had ended. That change did not alter Hodder’s account of the strategy or the investigation.
The lawsuit that exposed the system
Jane Street helped reveal the strategy itself. In April 2024, the firm filed a lawsuit against two former traders whom it accused of taking the Indian method to Millennium Management. A redacted filing said that the strategy had generated a billion dollars in profit during 2023.
Bloomberg reported on the lawsuit, and SEBI cited that article as the event that started its investigation. A firm that had guarded its methods through secrecy placed the claim in a public legal document and gave regulators a route into the trades. The “infinite money glitch” ended because the mechanism became visible and the regulator treated the stock transactions as manipulation.
Limits
This note reconstructs Hamish Hodder’s account of the SEBI investigation and the strategy described in the video. The figures about options volume, individual losses, Jane Street’s revenue, and unlawful profits are claims reported by the source. The note does not independently establish the legal findings, the firm’s response, or the later status of the regulatory proceedings. It is a description of a market-structure case, not a trading recommendation.