Buying a PUT option on Fear

In the recent times, capital markets have been very divergent in nature. Most of the investor’s portfolios have drained in value whereas the broad market indices like NIFTY & SENSEX have been quite resilient to this fall. Large cap stocks are all in the green and command a strong valuation, at the same time the very discounted mid & small caps show no sign of revival. In-spite of knowing these facts it is tough for investors to control their emotions and buy into the stocks that have lost a lot of value irrationally because of the feared markets. We agree that it is difficult to practice than to preach & hence Instead of preaching to follow non-emotional investing, we have done a study to build a strategy that is capable of providing a viable and a risk controlled approach towards benefiting from market crashes like the current one. In analogy, how to buy a PUT option on the currently prevailing fear in the mid/smallcap stocks.