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Informed trading has a strong liaison with the options market, as the risk in the options market is limited to the premium, leverage is high and the transaction cost is less. The purpose of this paper is to analyze the effect of options availability on the informed trading, occurring well before the merger and acquisition (M&A) announcements along with the crisis period and regulation effect.

The study employs event study methodology for 864 M&A announcements done by Indian acquiring companies in order to compute the abnormal returns and also examine the implied volatility and volume of call, putting options for the robustness check.

The results indicate that option listing status increases the possibility and magnitude of informed trading in the M&As, which gets more/less pronounced during and immediately after the crisis period when new regulatory reforms are introduced.

This study contributes to the efficient market theory and affirms that stock market of acquiring companies in India follow a semi-strong form of market efficiency around M&A announcements in the presence of options market.

The systematic risks related to credit financing has received significant attention in the academic domain during and after any financial crisis. However, the role of insurance has not been adequately studied in the context of crises. The extant literature also shows that the scale of credit financing depends upon the availability of credit insurance and on the policy orientation. Past evidence shows that demand for credit insurance was significantly high during the crisis period. Therefore, this chapter proposes to study the role of various combinations of these two aspects near the period of crisis. The findings of this chapter are based on the outcomesof previous research articles on these topics. The research articles are gathered from various online databases for the years 2000–2014 for the G7 economies. This chapter has alsoincluded facts from contextual policy documents on monetary and fiscal policies where it finds them necessary. Broadly, this chapter describes the role of policies when two mutually dependent industries interact and adversely impact market equilibrium.