Lacking options

Surging volatility, a healthy underlying market and increased liquidity in the exchange-traded sector have attracted foreign investors to Indian equities. But short-selling is not permitted and there is no over-the-counter options market, although things may be changing. By Sarfraz Thind

India's expansion into the global economy has occurred at a dramatic pace. Overall assets under management of foreign funds investing in India grew from around $5 billion in 2005 to around $25 billion at the start of this year, according to HSBC's alternative investment arm Halbis. But despite the growth levels, investment in India's equity markets has been stymied by the lack of a fully developed