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?
Answer & explanation
Answer: (a) I and II only
Indian exchanges lead the world in the number of derivative contracts traded, driven by a boom in index options, and India's equity market has grown fast enough to rank among the world's five largest. Statement III is false: SEBI is the statutory regulator, it registers and regulates investment advisers, and it has itself published studies on retail losses in futures and options.
- ✓ I SEBI, citing World Federation of Exchanges data, notes that an Indian exchange ranks first globally by number of contracts traded, far ahead of the next exchange.
- ✓ II The Economic Survey 2023-24 records that the Indian market rose to fifth in the world by market capitalisation in FY24, while Hong Kong was among the few major markets that did not post better returns that year. Business Standard, reporting Bloomberg data, said in January 2024 that India's market capitalisation had overtaken Hong Kong's for the first time.
- ✗ III The SEBI Act sets up SEBI to protect the interests of investors in securities and to regulate the securities market, including registering and regulating investment advisers. Its September 2024 study found that over 9 in 10 (93%) individual F&O traders incurred losses between FY22 and FY24.
Remember · India leads the world in exchange-traded options volume; SEBI's 2024 study: 93% of individual F&O traders lost money (FY22–FY24). SEBI is the regulator and registers investment advisers.
Sources
- SEBI, Comparative study of growth in Equity Derivatives Segment vis-à-vis Cash Market after recent measures (July 2025) ↗ “basis data of World Federation of Exchanges, for the period March 2025, Indian exchange holds top position among the global peers in terms of number of contracts traded”
- Economic Survey 2023-24, Chapter 2: Monetary Management and Financial Intermediation ↗ “Significant interest from domestic and global investors in the Indian stock market as an attractive investment destination and sustained IPO activity placed the Indian market fifth in the world by market capitalisation in FY24. … All the major markets, except China and Hong Kong, delivered better returns during the period compared to the previous year.”
- SEBI Press Release PR No. 22/2024, Updated SEBI Study Reveals 93% of Individual Traders Incurred Losses in Equity F&O ↗ “A new study conducted by the Securities and Exchange Board of India (SEBI) has revealed that over 9 out of 10 individual traders in the equity futures and options (F&O) segment continue to incur significant losses.”
- Business Standard (Bloomberg), 23 Jan 2024: In a first, India overtakes Hong Kong as world's fourth-largest stock market ↗ · reference work “market capitalization has overtaken Hong Kong’s for the first time as the South Asian nation’s growth prospects and policy reforms make it an investor darling”
- The Securities and Exchange Board of India Act, 1992 (SEBI): long title ↗ “An Act to provide for the establishment of a Board to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market … registering and regulating the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers”
Question and answer: UPSC's official GS Paper I (2025, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 1 Oct 2026 (how we verify). ·