Consider the following statements:

1. India accounts for a very large proportion of equity option contracts traded globally thus exhibiting a great boom.
2. India’s stock market has grown rapidly in the recent past even overtaking Hong Kong’s at some point of time.
3. There is no regulatory body either to warn the small investors about the risks of options trading or to act on unregistered financial advisors in this regard.

Which of the statements given above are correct?

1. I and II only
2. II and III only
3. I and III only
4. I, II and III

Explanation

Statement I is correct

• India has emerged as one of the largest markets globally for equity options trading in terms of the number of contracts traded. In 2023, Indian investors traded 85 billion options ­contracts, more than anywhere else in the world.

Statement II is correct

• India’s stock market temporarily surpassed Hong Kong’s market capitalization in early 2024, becoming the fourth largest stock market in the world.

Statement III is incorrect

• India has an active regulatory authority, the Securities and Exchange Board of India (SEBI), responsible for overseeing and regulating the securities market.

Answer: (a) I and II only; Difficulty Level: Easy