Reliance Industries Sees Heavy Put Option Activity Ahead of February Expiry

Put Option Activity Highlights

Data from the derivatives market reveals that Reliance Industries Ltd (NSE: RELIANCE) saw a combined total of 19,664 put contracts traded for the 24 February 2026 expiry, with the ₹1,420 strike leading at 10,321 contracts and the ₹1,400 strike close behind at 9,343 contracts. The turnover for these strikes was substantial, amounting to ₹490.25 lakhs and ₹172.38 lakhs respectively, reflecting strong investor interest in downside protection or speculative bearish bets.

Open interest figures further underscore this trend, with 3,395 contracts open at the ₹1,420 strike and 8,399 at ₹1,400, indicating that many traders are maintaining their bearish positions or hedges as expiry approaches. The underlying stock price stood at ₹1,433.70 on 18 February 2026, placing these strike prices just below the current market level and suggesting a focus on near-the-money downside risk.

Market Context and Stock Performance

Reliance Industries, a heavyweight in the oil sector with a market capitalisation of ₹19,28,850 crores, has shown resilience in a volatile market. On 18 February 2026, the stock outperformed its sector by 0.49%, delivering a 0.65% gain compared to the sector’s 0.13% rise and the Sensex’s marginal decline of 0.02%. Despite this, the stock’s moving averages paint a mixed picture: it trades above its 20-day moving average but remains below its 5-day, 50-day, 100-day, and 200-day averages, indicating short-term strength amid longer-term consolidation.

Investor participation has waned recently, with delivery volumes on 17 February falling by 30.49% against the five-day average, signalling reduced conviction among buyers. Liquidity remains adequate, with the stock capable of supporting trade sizes up to ₹28.22 crores based on 2% of the five-day average traded value, ensuring that option market activity is supported by sufficient underlying liquidity.

Bearish Positioning and Hedging Implications

The concentration of put option activity at strikes slightly below the current market price suggests that traders are positioning for a potential pullback or are hedging existing long exposures. The ₹1,400 strike, with its high open interest and turnover, acts as a key psychological and technical support level. Should the stock breach this level, it could trigger further downside pressure, validating the bearish sentiment embedded in the options market.

Moreover, the elevated put volumes relative to call options indicate a skew towards downside protection. This is consistent with a cautious outlook amid ongoing macroeconomic uncertainties impacting the oil sector, including fluctuating crude prices and regulatory developments. Investors may be using these puts either as insurance against a correction or as speculative plays anticipating a decline.

Reliance’s Mojo Score and Analyst Ratings

Reliance Industries currently holds a Mojo Score of 62.0, categorised as a Hold, reflecting a tempered outlook compared to its previous Buy rating downgraded on 6 January 2026. The downgrade aligns with the observed option market activity and the mixed technical signals. The company’s market cap grade remains at 1, underscoring its status as a large-cap stalwart within the oil sector.

Analysts note that while Reliance’s diversified business model and strategic investments provide resilience, near-term headwinds in the oil market and subdued investor participation warrant caution. The stock’s ability to sustain above key moving averages and maintain liquidity will be critical in determining its trajectory in the coming weeks.

Expiry Patterns and Market Sentiment

The 24 February 2026 expiry is shaping up as a critical juncture for Reliance Industries. The heavy put option volumes at near-the-money strikes suggest that traders are bracing for volatility or a potential correction in the short term. This expiry could see increased price swings as option writers and holders adjust their positions to manage risk and capitalise on market movements.

Historically, Reliance’s options market has exhibited heightened activity around major expiry dates, often reflecting broader market sentiment shifts. The current pattern of elevated put interest contrasts with relatively muted call activity, reinforcing the notion of a cautious or bearish stance among sophisticated investors.

Investor Takeaways

For investors, the pronounced put option activity at ₹1,400 and ₹1,420 strikes serves as a warning signal to monitor downside risks closely. While the stock’s recent outperformance and liquidity profile remain positive factors, the technical indicators and option market positioning counsel prudence. Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate potential losses.

Conversely, traders with a bearish outlook might view the current option market data as an opportunity to capitalise on expected volatility or a pullback. However, given Reliance’s large-cap status and strategic importance in the oil sector, any significant price moves will likely be influenced by broader macroeconomic developments and sectoral trends.

Conclusion

Reliance Industries Ltd’s heavy put option trading ahead of the 24 February expiry highlights a growing cautiousness among market participants. The clustering of activity at strikes just below the current price reflects a hedging mindset and bearish positioning amid mixed technical signals and subdued investor participation. While the stock remains fundamentally strong, the options market suggests that investors should remain vigilant for potential near-term volatility and downside risks.

As expiry approaches, monitoring open interest changes and price action around the ₹1,400 level will be crucial for gauging market sentiment and potential directional shifts in this oil sector giant.

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