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 in time.
III. There is no regulatory body either to warn 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?
Answer: (a) I and II only Explanation: ● Statement I is correct: India has become one of the largest markets for equity options trading globally, with a significant share of global volumes, reflecting a surge in derivatives trading. ● Statement II is correct: India’s stock market (measured by market capitalization) has experienced rapid growth and briefly surpassed Hong Kong’s stock market in early 2024, becoming the fourth-largest globally. ● Statement III is incorrect: India has regulatory bodies like the Securities and Exchange Board of India (SEBI), which oversees market activities, issues investor warnings, and takes action against unregistered financial advisors. SEBI has repeatedly cautioned retail investors about the risks of derivatives trading.