Options traders are buying the most protection against losses in 14 months as Indian stocks rallied to a record for a second straight day.

The ratio of outstanding CNX Nifty index puts to calls rose to 1.40 at 3:50 p.m. in Mumbai, the highest since Oct. 31, 2013, according to data compiled by Bloomberg. The 50-stock Nifty gained 0.4 percent to 8,729.50 at the close for a fifth day of gains. The India VIX Index rose 2.6 percent to 17.71, the highest level in two weeks.

“We are advising clients to book some profits after the sharp rally,” Rajendra Wadher, director at PRB Securities, said by phone from Mumbai today.

The equities rally comes after last week’s unscheduled interest rate cut by the Reserve Bank of India, and before the federal budget expected next month. Central bank Governor Raghuram Rajan has said continuing disinflationary pressures and sustained fiscal consolidation by the government would be critical for further easing of monetary policy. The RBI’s next policy meeting is on Feb. 3.

The benchmark 30-stock Sensex, which closed 0.4 percent higher today, is this month’s best performer in U.S. dollar terms among 93 global equity indexes tracked by Bloomberg.

Overseas investors purchased $ 67.6 million of stocks on Jan. 19, taking this year’s inflows to $ 223.3 million. Foreigners bought a net $ 162.2 million of Nifty options yesterday, according to data compiled by Bloomberg.

The Nifty is valued at 16 times its projected 12-month results. The MSCI Emerging Markets Index trades at 11.4 times.

To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net

To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net Phani Varahabhotla, Matthew Oakley