A standard bear-spread with long 2950p (50.7) versus short 2930p (47.85) has a better risk:reward ratio. The position could lose a maximum of 2 while gaining a maximum of 18.
However the OI at 2930 is low so this price is non-indicative. A long 2950p (50.7) versus short 2900p (33.75) costs about 17 with more reliable prices. It has a maximum possible pay off of 33 so the risk:reward ratio is good.
While we don't expect too much of a downside, a possible correction will pull prices down till around 2930 before it runs into support. So it's reasonable to take bear-spread given the decent risk:reward ratios.
Strangles are possible with a wide range of 2950p (50.7) and 3000c (52.15). This costs around 102 and it would pay if the market moved beyond 2850-3100. That doesn't seem likely in normal circumstances.
However pre-Budget volatility could cause this 3.5 per cent envelope to be penetrated. If you decide to buy this strangle try to offset it with a short 2800p (14) and a short 3100c (not available at the moment).
If you decide to sell this strangle, offset with a long 2850p (22) and a long 3050c (not available). That way, the potential for loss in case of an adverse movement would be less.
In terms of sectors, it may be worth buying a long position in the Bank Nifty since that group of stocks seems to be recovering from a low. The February Bank Nifty future is trading at 4680 while the spot Bank Nifty is at 4666. The premium is one indication that people are bullish
