UPSC Prelims 2025, Question 8

The answer: I and II only

Both quantitative claims trace to widely reported 2023-24 market developments. On equity options, SEBI's own study and exchange data showed India accounting for a dominant share of all equity option contracts traded worldwide by number of contracts, a boom fuelled by weekly index options on the Nifty and Bank Nifty and a surge in retail futures-and-options participation. Separately, in January 2024 India's stock market capitalisation overtook Hong Kong's, making India briefly the world's fourth-largest equity market, a milestone that drew wide financial-press coverage. Statement III fails because SEBI is very much the regulator on both fronts: it runs investor-awareness campaigns specifically flagging options-trading risk, having found in its own 2023 study that nine out of ten individual F&O traders lose money, and it holds direct powers under the SEBI (Investment Advisers) Regulations, 2013 to act against unregistered advisors and finfluencers.

The option-by-option autopsy for this question — why each of the other three is wrong, and which neighbouring concept each one was built from — is in the app.