Consider the following statements: [Miscellaneous]

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?

The correct option is I and II only.

Let us analyze each statement step-by-step to understand why this option is correct:

Statement I is correct: In recent years, India has witnessed an unprecedented boom in derivatives trading. According to data from the Futures Industry Association (FIA), the National Stock Exchange of India (NSE) has consistently ranked as the world's largest derivatives exchange by the volume of contracts traded. India accounts for a massive portion of all equity option contracts traded globally, driven largely by retail participation in short-duration index options.

Statement II is correct: India's stock market has experienced rapid growth, fueled by strong economic growth and increasing domestic retail participation. The total market capitalization of Indian equities has grown significantly, even overtaking Hong Kong's stock market capitalization at points of time (such as in January 2024) to briefly become the fourth-largest equity market globally.

Statement III is incorrect: There is a regulatory body in India. The Securities and Exchange Board of India (SEBI) is the statutory regulator for the securities market. SEBI actively warns retail investors about the risks of options trading (for example, by mandating brokers to display prominent risk disclosures showing that approximately 9 out of 10 individual traders in the equity futures and options segment incur losses). Furthermore, SEBI regularly takes strict enforcement and regulatory actions against unregistered investment advisors and financial influencers ("finfluencers") who offer unauthorized advice.

Therefore, since statements I and II are correct while statement III is incorrect, the correct choice is I and II only.