Try standard bull-spread

DERIVATIVES

Last week

Previous week

Abs. chg.

1-m prem/(disc)

-7.65

-5.05

-2.6

2-m prem/(disc)

-13.75

-15.1

1.35

3-m prem/(disc)

19.4

-23.8

4.4

Futures OI

1,085.36

1,349.96^

 -19.6

Options OI

438.18

787.68^

 -44.3

PCR

1.3

0.69

0.61

PVI

1.56

1.26

0.3

* In lakhs ^ % change

 The sudden crash has meant that premiums in both directions are a little uncertain. While liquidity exists across the option chain, there may be a further buildup in puts (and hence, a rise in put premiums) that are currently out of money. At the same time, call option premiums above spot are likely to decline. 

Stocks with highest change in prem/(disc)*
	last week	previous week
Ashok Leyland	0.2	-0.8
Karnataka Bank	1.05	-1.05
Maruti Udyog	0.65	-8.8
Bank of India	0.8	-2.45
Dr Reddy's	-4	-14.5
Wipro	-2.1	-12.35
Nicholas Piramal	2.21	-1.1
Jindal Steel	7.7	-2.95
ABB	13.35	-1.55
Bajaj Auto	2.8	-9.3

 Since the market could range-trade in either direction from spot, all sorts of positions may prove profitable. Our perspective of a possible short-term rise followed by several dips means, however, that bull-spreads will need fast footwork to cash in because they will only be profitable momentarily.  During this sort of uncertain situation, with the market poised to move either way, the risks are very high for a premium seller. We would advice against creating spreads, which require short positions close to money.  A standard bull-spread with a long 2210c (31.35) versus short 2230c (25.5) costs about 6 and it could pay a maximum of 14. A standard bear-spread with long 2170p (32) versus a short 2150p (28) would cost 4 and might pay a maximum of 16. However, it