Rs 1,350 Puts — 1.5% Below Current Price — Draw 8,554 Contracts on Reliance Industries Ltd

Put Options Event and Cash Market Context

On 20 April 2026, Reliance Industries Ltd saw 4,045 put contracts traded at the Rs 1,350 strike and 4,509 contracts at Rs 1,360, amounting to a combined turnover exceeding ₹749 crores. The open interest at these strikes stands at 4,125 and 3,615 contracts respectively, indicating a substantial build-up of positions close to the current underlying price of Rs 1,370.80. The expiry date of 28 April 2026 is just over a week away, concentrating the options activity in a near-term timeframe.

This surge in put activity coincides with a modest 0.31% gain in the stock price on the day, which is in line with the sector's 0.16% rise and contrasts with the Sensex's 0.25% decline. The stock has also gained 1.97% over the past two days, trading above its 5-day and 20-day moving averages but remaining below the 50-day, 100-day, and 200-day averages. Delivery volumes have declined by nearly 31% compared to the five-day average, suggesting a rally with thinner participation.

The combination of rising prices and heavy put activity raises the question: is this put buying a protective hedge or a bearish conviction?

Strike Price Analysis: Moneyness and Intent

The Rs 1,350 strike is approximately 1.5% out-of-the-money (OTM) relative to the current stock price, while the Rs 1,360 strike is roughly 0.8% OTM. These strikes sit just below the underlying price, positioning them as near-the-money puts. The proximity to the current price suggests that the put buyers are not expecting a sharp decline but are likely seeking protection against a modest pullback.

In options parlance, OTM puts bought on a rising stock often signal hedging activity, where investors protect unrealised gains from recent rallies. Conversely, if these puts were deep in-the-money (ITM) or at-the-money (ATM) during a falling market, the interpretation would lean more towards bearish positioning. The current scenario, with the stock trending upwards and puts clustered just below the price, aligns more with a protective stance.

Alternatively, some of this activity could represent put writing, where sellers collect premium betting the stock will not fall below these strikes by expiry. However, the high turnover and open interest suggest more buying than selling, making put writing a less dominant factor here.

Given the stock's recent gains and the strike distance, what does this imply about the market’s expectations for near-term price movements?

Interpretation Framework: Hedging, Bearish Positioning, or Put Writing?

Put options activity can be ambiguous, especially when the stock is rising. The three main interpretations are:

• Protective Hedging: Investors holding long positions buy OTM puts to guard against a short-term correction. This is common when the stock has rallied but delivery volumes are weak, as is the case here.
• Directional Bearish Bet: Buying ATM or ITM puts expecting a decline. This is less likely given the stock’s recent gains and the OTM nature of the strikes.
• Put Writing: Selling puts to collect premium, betting the stock will stay above the strike. The high turnover and open interest suggest more buying than selling, making this a secondary factor.

Given the stock’s position above short-term moving averages and the strike prices just below the current level, the protective hedging interpretation is the most plausible. The decline in delivery volumes supports this, as investors may be cautious about the rally’s sustainability and seek downside protection.

Open Interest and Contracts Analysis

The combined 8,554 contracts traded at Rs 1,350 and Rs 1,360 strikes represent significant fresh activity relative to open interest of 7,740 contracts at these strikes. The ratio of contracts traded to open interest is approximately 1.1:1, indicating that much of this activity is new positioning rather than mere rollovers or adjustments.

This fresh positioning suggests a deliberate move by market participants to establish downside protection or speculative positions close to the current price. The slightly higher open interest at Rs 1,350 compared to Rs 1,360 also indicates a preference for protection at the lower strike, consistent with a cautious outlook.

Cash Market Context: Momentum and Moving Averages

Reliance Industries Ltd has gained nearly 2% over the past two days and trades above its 5-day and 20-day moving averages, signalling short-term strength. However, it remains below the 50-day, 100-day, and 200-day averages, indicating that the medium- to long-term trend is less certain.

The Rs 1,350 put strike roughly aligns with a support zone below the 50-day moving average, suggesting that put buyers may be hedging against a pullback to this technical level rather than anticipating a sharp decline. The recent fall in delivery volumes by nearly 31% compared to the five-day average further implies that the rally lacks robust participation, which often prompts protective strategies.

Such a technical setup raises the question: should investors interpret this put activity as prudent risk management or a signal of underlying weakness?

Delivery Volume and Market Participation

Delivery volumes on 17 April stood at 70.57 lakh shares, down 30.87% from the five-day average, indicating a thinning of genuine buying interest despite the recent price gains. This divergence between price and delivery volume often signals a rally driven by short-term traders rather than sustained institutional accumulation.

In this context, the surge in put buying can be seen as a rational response by investors to protect gains or limit downside risk amid uncertain participation quality. The liquidity of the stock, sufficient for trades of around ₹61.35 crore based on 2% of the five-day average traded value, supports active options trading and the establishment of such hedges.

Conclusion: Protective Hedging Dominates Put Activity

The concentrated put option activity at strikes Rs 1,350 and Rs 1,360, just below the current price of Rs 1,370.80, combined with the stock’s recent modest gains and technical positioning, points towards a dominant interpretation of protective hedging rather than outright bearish bets. The fresh positioning indicated by the ratio of contracts traded to open interest, alongside declining delivery volumes, reinforces the view that investors are managing risk amid a rally that lacks strong delivery-backed conviction.

While put writing and speculative bearish positioning cannot be entirely ruled out, the data-driven analysis suggests that the options market is primarily signalling caution and protection. This nuanced picture highlights the importance of connecting options data with cash market trends to understand the true intent behind heavy put activity.

Given this, should investors consider this put activity as a prudent risk management signal or a warning of deeper weakness in Reliance Industries Ltd?

Limited Period Only. Get Started for only Rs. 16,999 - Get MojoOne for 2 Years + 1 Year Absolutely FREE! (72% Off) Get 72% Off →