UPSC Prelims 2025 · Question 38 of 100
UPSC Prelims 2025 question on India Equity Options Trading
- ExamUPSC CSE
- Year2025
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicSecurity Market in India
- DifficultyMedium
- TypeStatement
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. I and II only
Verdict
Statements I and II are correct → Option (a).
Statement by statement
Statement I – CORRECT: India has emerged as a dominant player in the global equity options market. In the first quarter of 2024, over 84% of all equity options traded globally were on Indian exchanges, a significant increase from just 15% a decade earlier.
Statement II – CORRECT: In January 2024, the combined value of shares listed on Indian exchanges reached $4.33 trillion, surpassing Hong Kong's $4.29 trillion, making India the world's fourth-largest stock market.
Statement III – INCORRECT: India has an active regulatory body — the Securities and Exchange Board of India (SEBI) — which oversees the securities market. SEBI has taken several measures to protect investors, including issuing warnings to unregistered investment advisors and implementing regulations to curb speculative trading in derivatives.