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Re:Jane Street barred from Indian markets as regulator freez... by lmm on Sunday July 06, 2025 @09:03PM (#44485677)
What matters is the volume rather than the liquidity per se, but the two are generally pretty well correlated. The point is that moving a market costs money, making a trade moves the market against that trade, so even if someone is deliberately trying to move a market they'll pay more than they could ever hope to recoup. The exception is when there's a derivative market that has more volume than the underlying - in that case profitable manipulation becomes possible, as you can spend to move the underlying, losing money, but making more money on the derivatives where you'd bought the other side.
Re:Jane Street barred from Indian markets as regulator freez... by PartiallyTyped on Sunday July 06, 2025 @09:52PM (#44485974)
Heavy gamma exposure also helps move the market by forcing dealers to hedge in some particular direction.
Re:Jane Street barred from Indian markets as regulator freez... by toomuchtodo on Sunday July 06, 2025 @10:16PM (#44486104)
During the memestock craze, retail traders were able to create a gamma squeeze due to this forced hedging.

https://www.nasdaq.com/articles/what-gamma-squeeze-understan...

Re:Jane Street barred from Indian markets as regulator freez... by PartiallyTyped on Monday July 07, 2025 @04:19AM (#44487921)
And it was glorious! MMs sure learned though. Premiums have exploded now.
Re:Jane Street barred from Indian markets as regulator freez... by throwaway2037 on Monday July 07, 2025 @12:20AM (#44486724)

    > What matters is the volume rather than the liquidity per se
What is the difference between volume and liquidity for the purpose of this discussion?

    > The exception is when there's a derivative market that has more volume than the underlying
This is wildly rare in public markets.
Re:Jane Street barred from Indian markets as regulator freez... by lmm on Monday July 07, 2025 @12:36AM (#44486796)
> What is the difference between volume and liquidity for the purpose of this discussion?

You're the one asking "Why would liquidity matter here?", you tell me. Like I said, they're correlated well enough that it doesn't really matter as far as I can see.

> This is wildly rare in public markets.

Yes, but it's what happened here.

Re:Jane Street barred from Indian markets as regulator freez... by greyw on Monday July 07, 2025 @12:43AM (#44486829)
Option markets are quite often more liquid than the underlying in India which is why Janestreet was able to pull that off.

Retail folks use options to gamble. Apps gamify access/trading. It's really odd like that.