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 witnessed 1,566 put option contracts traded for the expiry dated 30 December 2025. The strike price attracting the highest volume is ₹1540, with an open interest standing at 2,806 contracts. The turnover for these put options reached ₹156.99 lakhs, underscoring significant investor interest in downside protection or speculative bearish bets.

The underlying stock value at the time of this activity was ₹1547.6, placing the ₹1540 strike price slightly below the current market price. This proximity suggests that traders are positioning for potential price corrections or are hedging existing long positions against near-term volatility.

Stock Price Context and Market Positioning

Reliance Industries closed the day approximately 2.24% away from its 52-week high of ₹1581.3, indicating that the stock remains near its peak levels. The day's price movement was in line with the broader oil sector, with the stock recording a 0.49% return compared to the sector's 0.34% and the Sensex's 0.10% gains.

After experiencing three consecutive days of decline, the stock has shown signs of recovery, trading within a narrow range of ₹11.5. Its price currently sits above the 20-day, 50-day, 100-day, and 200-day moving averages, although it remains below the 5-day moving average, suggesting short-term consolidation amid longer-term strength.

Investor participation appears to be moderating, with delivery volumes on 3 December recorded at 43.45 lakh shares, representing a 33.11% reduction compared to the five-day average delivery volume. Despite this, liquidity remains sufficient for sizeable trades, with the stock supporting a trade size of approximately ₹29.61 crore based on 2% of the five-day average traded value.

Implications of Put Option Concentration

The concentration of put option activity at the ₹1540 strike price, close to the current market price, often indicates a strategic move by investors to hedge against potential downside risks. This is particularly relevant for a stock like Reliance Industries, which operates in the oil sector—a segment sensitive to global commodity price fluctuations and geopolitical developments.

Open interest of 2,806 contracts at this strike suggests that a sizeable number of market participants are either protecting their holdings or speculating on a price correction before the December expiry. The turnover of nearly ₹157 lakhs in put options further highlights the liquidity and active trading interest in these contracts.

Expiry Patterns and Market Sentiment

With the expiry date set for 30 December 2025, traders are positioning themselves ahead of year-end market dynamics, which can be influenced by macroeconomic data releases, crude oil price movements, and corporate earnings announcements. The put option activity may also reflect a cautious stance amid global uncertainties and potential volatility in the oil sector.

Reliance Industries’ market capitalisation stands at ₹20,92,660.99 crore, categorising it as a large-cap stock with substantial institutional and retail investor interest. The stock’s ability to maintain levels above key moving averages suggests underlying strength, even as some investors seek protection through put options.

Comparative Market Context

Reliance Industries’ put option activity stands out in comparison to other stocks in the oil sector, where option volumes tend to fluctuate with crude oil price trends and sectoral news flow. The stock’s recent price behaviour, including a rebound after a short-term decline and trading near its yearly peak, contrasts with the cautious positioning implied by the put option volumes.

This divergence may indicate that while the broader market sentiment remains positive, some investors are preparing for potential short-term corrections or increased volatility. The presence of put options at strike prices close to the current market value is a common risk management tool, especially for large-cap stocks with significant exposure to global commodity cycles.

Outlook and Investor Considerations

Investors tracking Reliance Industries should monitor the evolving open interest and volume patterns in both put and call options as the December expiry approaches. Changes in these metrics can provide insights into shifting market expectations and potential price movements.

Additionally, the stock’s position relative to key moving averages and delivery volumes offers clues about underlying investor conviction and liquidity conditions. While the stock remains liquid enough to support substantial trade sizes, the recent decline in delivery volumes may suggest a temporary pause in strong investor participation.

Overall, the heavy put option activity at the ₹1540 strike price signals a nuanced market stance, blending optimism about the stock’s longer-term prospects with prudence against near-term risks.

Conclusion

Reliance Industries Ltd’s prominence in put option trading ahead of the December 2025 expiry highlights a significant focus on downside protection and hedging strategies among market participants. Despite trading close to its 52-week high and maintaining strength above major moving averages, the stock’s derivatives activity suggests that investors are preparing for potential volatility in the near term.

As the expiry date nears, continued observation of option volumes, open interest, and price action will be essential for understanding the evolving market sentiment surrounding this oil sector heavyweight.

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