The results of state elections in Chhattisgarh, Madhya Pradesh, and Rajasthan, where BJP is the existing political party, will be keenly watched by market participants.

The Sensex, which rose around 5% in November, has lost almost 2% thus far in December due to weak global cues and uncertainty around the results of the five state elections currently underway, which are slated to be declared on Tuesday, December 11.

The market watch for BJP to keep back Chhattisgarh and Madhya Pradesh, but lose Rajasthan.

The one thing that will certainly happen over the next couple of days is an increase in volatility. But there is a way you can make money from the wild swings.

Follow InvesteliteResearch Strategies that investors can put into position onwards of the announcement of election results:

Strategy:  Buy 10,700 put option along with 11,000 call option

We advise traders to buy 10700 put option along with 11000 strike call option and to reduce the cost further they should sell 11400 call option.

Strategy: Buy 10,500 PE around 80 and simultaneously sell 10,000 PE

We feel that the volatility would largely remain status quo & therefore a covered strategy would be the best to be implemented. We suggest investors to BUY 10500 PE around 80 and simultaneously SELL 10000 PE @ 20, hence the cost of the strategy will be 80-20=60 and the break-even would be 10440 on expiry basis.

we do not expect Nifty to reach 11500 levels in the current month; hence, we also recommend selling 11500 CE.

Strategy: Short 10,400 put option at 60-65 and 11,200 call option at 40-45

We recommend a short volatility play as mean reversion will come into picture and volatility would find it tough to move further after the event. Hence, one can short 10400 Put at 60-65 and 11200 Call at 40-45. Total inflow is 100-110. Keep stop loss at 140 for total premium with a target of 10.

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