Consider the following statements :
- I.India accounts for a very large portion of all equity option contracts traded globally thus exhibiting a great boom.
- II.India's stock market has grown rapidly in the recent past even overtaking Hong Kong's at some point of time.
- III.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?
Show answer
Answer: A. Statement I is correct: India has the largest share of equity option contracts traded in the world, with very fast growth in recent years. Statement II is correct: India's stock market value overtook Hong Kong's in January 2024. Statement III is wrong: SEBI regulates options trading, warns small investors about risks (for example, its studies on F&O losses) and acts against unregistered investment advisers. So I and II.
Watch for: Statement III's 'no regulatory body' should make you think of SEBI at once.
Why the other options are wrong
- B. Wrong because Statement III is incorrect; SEBI is the regulator.
- C. Wrong because Statement III is incorrect.
- D. Wrong because Statement III is incorrect.
Source to check: SEBI website (study on F&O trader losses, 2023 and 2024); Futures Industry Association (FIA) volume data; news reports of January 2024 on market capitalisation
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.