Reliance Industries Sees Heavy Put Option Activity Ahead of December Expiry

Put Option Activity Highlights

Data from the derivatives market reveals that Reliance Industries’ put options with a strike price of ₹1,550 expiring on 30 December 2025 have recorded 3,566 contracts traded. This volume translates into a turnover of approximately ₹68.82 lakhs, with open interest standing at 3,724 contracts. The underlying stock price at the time of this activity was ₹1,557, placing the strike price just below the current market value, which suggests that traders are positioning for potential downside or seeking protection against near-term volatility.

Stock Price Context and Recent Performance

Reliance Industries is trading close to its 52-week high, just 1.5% shy of the peak price of ₹1,581.3. Despite this, the stock has experienced a three-day consecutive decline, with a cumulative return of -1.1% over this period. The price movement has been confined within a narrow range of ₹5.9, indicating subdued volatility in the immediate term. The stock’s price remains above its 20-day, 50-day, 100-day, and 200-day moving averages, although it is currently below the 5-day moving average, signalling some short-term pressure.

Investor participation appears to be moderating, as delivery volumes on 24 December 2025 were recorded at 46.22 lakh shares, representing a 13.04% reduction compared to the five-day average delivery volume. This decline in delivery volume may reflect a cautious approach by investors amid the recent price consolidation.

Market and Sector Comparison

On the day of the observed activity, Reliance Industries’ stock return was marginally negative at -0.08%, closely tracking the oil sector’s return of -0.05%. The broader Sensex index recorded a decline of -0.19%, indicating that Reliance’s performance was broadly in line with sectoral and market trends. The company’s market capitalisation stands at a substantial ₹21,07,005.41 crore, categorising it firmly as a large-cap stock within the oil industry.

Interpretation of Put Option Interest

The concentration of put option activity at the ₹1,550 strike price, which is slightly below the current market price, suggests that investors may be hedging their long positions or speculating on a potential price correction. Put options serve as a form of insurance against downside risk, and the elevated open interest indicates that a sizeable number of market participants are seeking protection or positioning for bearish scenarios as the expiry date nears.

Given the stock’s proximity to its 52-week high, this pattern of put buying could reflect a cautious sentiment amid concerns over near-term profit-taking or sector-specific headwinds. The oil industry, while showing resilience, remains sensitive to global crude price fluctuations, regulatory developments, and geopolitical factors, all of which can influence investor outlook.

Expiry Patterns and Market Implications

The expiry date of 30 December 2025 is a critical juncture for options traders, as positions are squared off or rolled forward. The significant open interest in put options at this strike price may lead to increased price sensitivity around this level, with potential support emerging near ₹1,550 if option sellers hedge their positions accordingly. Conversely, if the stock price moves below this strike, put option holders could exercise their rights, potentially accelerating downward momentum.

Market participants should monitor the evolving open interest and volume trends in the days leading up to expiry to gauge shifts in sentiment and potential price action. The interplay between put and call option activity will provide further insights into the balance of bullish and bearish expectations.

Liquidity and Trading Considerations

Reliance Industries exhibits sufficient liquidity to support sizeable trades, with the stock’s average traded value over five days allowing for trade sizes up to approximately ₹31.2 crore based on 2% of the average. This liquidity facilitates active participation by institutional and retail investors alike, enabling efficient execution of hedging and speculative strategies.

The recent decline in delivery volume, however, may indicate a temporary pause in strong investor conviction, possibly reflecting a wait-and-watch approach ahead of the expiry. Traders should consider this dynamic when assessing the risk-reward profile of new positions in the stock or its derivatives.

Broader Market Context

Reliance Industries’ performance and option market activity should also be viewed in the context of the broader oil sector and overall market trends. The sector’s marginally negative return on the day aligns with the stock’s slight dip, while the Sensex’s broader decline underscores a cautious market environment. Such conditions often prompt investors to seek downside protection through put options, as observed in this case.

Investors and traders monitoring Reliance Industries should remain attentive to upcoming macroeconomic data, crude oil price movements, and sector-specific developments that could influence the stock’s trajectory and option market behaviour in the near term.

Conclusion

The pronounced put option activity in Reliance Industries ahead of the 30 December 2025 expiry highlights a notable degree of bearish positioning or hedging among market participants. While the stock remains near its 52-week high and above key moving averages, the recent price softness and option market data suggest a cautious outlook. Investors should carefully analyse these signals alongside fundamental and technical factors to navigate potential volatility and make informed decisions.

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