New Delhi, April 30 -- After a sharp 12% rally in under two weeks, foreign portfolio investors (FPIs) are positioning for a period of limited market movement. On Tuesday, they executed a complex options strategy, known as 'iron butterfly', suggesting they expect the Nifty 50 to remain range-bound between 24,100 and 24,900-just 1.6% on either side of the 24,500 level-through May.

To hedge against a possible breakout or breakdown triggered by geopolitical events, they purchased a 24,000 put and a 25,000 call.

The trade came on a day of rising tensions: Prime Minister Narendra Modi gave the Indian armed forces a free hand to retaliate against Pakistan following a terror strike in Pahalgam that killed 27 people, including a foreign national...