Reliance Industries Sees Heavy Put Option Activity Ahead of December Expiry

Put Option Activity Highlights

Data from the derivatives market reveals that Reliance Industries Ltd’s put options with a strike price of ₹1570 have recorded 1,360 contracts traded on the day, with a turnover of ₹141.916 lakhs. The open interest stands at 2,369 contracts, indicating a substantial build-up of positions ahead of the expiry date. The underlying stock price at the time was ₹1572.7, placing the strike price just below the current market level, which may suggest hedging activity or speculative bets on a potential price correction.

Expiry Patterns and Market Context

The expiry date of 30 December 2025 is a key factor influencing option activity. As expiry approaches, traders often adjust their positions to manage risk or capitalise on expected price movements. The concentration of put options at the ₹1570 strike price, close to the current market price, points to a strategic choice by market participants to protect gains or position for a possible pullback in Reliance Industries shares.

Stock Performance and Technical Indicators

Reliance Industries is trading near its 52-week high, just 0.5% shy of the peak level of ₹1581.3. The stock has recorded gains over the last two consecutive days, delivering a cumulative return of 0.65% during this period. It has traded within a narrow range of ₹7.8, reflecting a phase of consolidation. Notably, the stock price is positioned above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a sustained upward trend from a technical perspective.

Investor Participation and Liquidity

Despite the positive price momentum, investor participation appears to be moderating. Delivery volume on 28 November was 52.44 lakh shares, which is 36.41% lower than the five-day average delivery volume. This decline in participation could indicate a cautious approach by investors amid the recent price gains. However, liquidity remains adequate, with the stock’s traded value supporting trade sizes up to ₹42.77 crore based on 2% of the five-day average traded value, ensuring smooth execution for large orders.

Comparative Sector and Market Returns

On the day of analysis, Reliance Industries posted a 1-day return of 0.40%, closely mirroring the Oil sector’s 0.39% gain and slightly outpacing the Sensex’s 0.32% rise. This alignment with sector and benchmark indices suggests that the stock’s movement is consistent with broader market trends rather than driven by idiosyncratic factors.

Market Capitalisation and Industry Position

Reliance Industries commands a market capitalisation of approximately ₹21,29,604.63 crore, categorising it as a large-cap stock within the Oil industry. Its size and sector prominence make it a focal point for institutional investors and derivatives traders alike, contributing to the observed option market activity.

Interpretation of Put Option Interest

The elevated put option volumes at the ₹1570 strike price may reflect a dual market dynamic. On one hand, investors could be employing puts as a hedge against potential downside risk after recent gains and the stock’s proximity to its 52-week high. On the other hand, speculative traders might be positioning for a correction or increased volatility in the near term. The open interest figure supports the notion of sustained interest rather than transient trading, indicating that these positions are likely to influence price action as expiry nears.

Outlook and Considerations for Investors

For market participants, the current derivatives activity in Reliance Industries offers insights into prevailing sentiment and risk management strategies. The narrow trading range combined with put option interest suggests a market awaiting a catalyst or confirmation of trend direction. Investors should monitor upcoming corporate developments, sectoral news, and macroeconomic indicators that could impact the oil industry and, by extension, Reliance’s stock performance.

Conclusion

Reliance Industries Ltd’s prominent put option activity ahead of the 30 December 2025 expiry highlights a nuanced market stance, blending cautious hedging with speculative positioning. The stock’s technical strength and sector alignment provide a backdrop of stability, yet the derivatives data signals that investors remain vigilant to potential shifts. As expiry approaches, the interplay between spot price movements and option market dynamics will be critical to watch for those engaged in the stock or the broader oil sector.

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