High-frequency trading firms in India recorded strong profit growth despite new regulatory constraints, demonstrating their ability to adapt within the nation’s $5.4 trillion equity market. Hudson River Trading led the gains, posting a 156% jump in profit for the fiscal year ending March 31, according to corporate filings. Optiver, along with domestic firms AlphaGrep and Graviton, also reported substantial increases.
India continues to attract market makers even as SEBI tightens oversight of retail derivatives activity. Recent measures include restricting weekly index contracts to one per exchange, requiring upfront option-premium payments, and raising contract sizes. SEBI also issued a temporary ban on Jane Street in July over alleged manipulative trades, which the firm denies. Jane Street and Citadel have yet to disclose results. Still, derivatives remain the biggest revenue generator for HFT firms, with algorithmic strategies contributing over half of NSE’s equity-derivatives turnover.
Hudson River posted about 22 billion rupees in profit and a 155% surge in operating revenue. Graviton’s profit rose 17%, AlphaGrep’s climbed 77%, and Optiver earned $44 million in its first full year. Firms are now expanding into multi-frequency strategies and other segments, while smaller retail traders increasingly exit derivatives, raising average order sizes.
