The stock of Torrent Pharmaceuticals (₹3,199.85) has been witnessing a fall in the recent weeks. Although the price has remained flat in the past few sessions, the price action shows a bearish tilt. We expect the current downtrend to extend towards the support band of ₹2,950-3,000 in the short term. Therefore, derivatives traders can either go short on futures contract or buy a put option, depending on the risk appetite.

Futures: The November expiry futures of Torrent Pharmaceuticals closed at ₹3,197.7 on Friday. The contract is likely to touch ₹3,000 in the near term. So, initiate fresh short positions at ₹3,200 with a stop-loss at ₹3,270. When the contract falls below ₹3,150, alter the stop-loss to ₹3,230. On a decline to ₹3,100, bring the stop-loss lower to ₹3,150. Tighten the stop-loss further to ₹3,100 when the contract slips to ₹3,050. Book profits at ₹3,020.

Options: Traders who wish to commit lower margins can buy put options instead of selling futures. Our suggestion is 3,200-strike November put, whose premium stood at ₹75.65 on Friday. Buy this option at ₹75 and place a stop-loss at ₹30. When the option price rallies to ₹120, modify the stop-loss to ₹80. When the contract rises to ₹160, trail the stop-loss to ₹120. Liquidate the position when the premium touches ₹190.

Note: The recommendations are based on technical analysis and F&O positions. There is a risk of loss in trading.

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