New Delhi, Jan. 30 -- As the Union Budget approaches, traders brace for heightened volatility in the Indian stock market. Historically, the Nifty 50 has exhibited intraday fluctuations within a 2-3% range on Budget Day, presenting both opportunities and risks for traders.

According to Sujit Modi, CIO of Share.Market, implied volatility (IV) surges in the days leading up to the Budget and drops sharply once the speech begins. This makes vega-based strategies, rather than traditional directional trading, more effective in capitalizing on the IV crush.

To validate this approach, multiple options strategies were tested, including Short Straddle, Short Strangle, Iron Fly, Iron Condor, Ratio Spreads, Butterflies, and more. The backtesting was...