Investigation reveals cross‑segment options‑futures scheme targeting low‑liquidity stocks

A detailed SEBI investigation has uncovered a sophisticated cross‑segment manipulation strategy that linked stock options and futures contracts to extract illicit gains. The probe focused on trading in relatively small‑cap, low‑liquidity stocks that rank in the lower half of market‑capitalisation among the approximately 211 NSE‑listed securities eligible for derivatives.

According to the interim order issued by full‑time member Kamlesh Chandra Varshney, the entities involved – Prasar Sampada Private Limited, Choubara Eats Private Limited and four individuals – placed large volumes of near‑the‑money options orders at prices both below and above current market levels. These orders were deliberately left untouched in the order book, creating an impression of demand or supply without actual execution.

Subsequently, at different times during the trading session, the same participants assumed opposite positions in the futures market, acting either as net buyers or net sellers. By coordinating these actions across two market segments, they could potentially influence the price of the underlying shares, thereby enhancing the profitability of their derivative positions.

The regulator’s surveillance systems at NSE and SEBI flagged the anomalous pattern after observing that the accused earned substantial profits from options while simultaneously recording losses in futures on the same shares. This contradictory outcome raised suspicion of manipulation rather than genuine market speculation.

SEBI has frozen 28.12 crore rupees of alleged illegal profits and barred the implicated parties from derivatives trading pending the outcome of the investigation. The board continues to assess whether the scheme was employed to artificially move share prices or merely to exploit market volatility through coordinated derivative trades.