Put Option Activity Concentrated Near Current Market Levels
Data from the derivatives market reveals that Reliance Industries has witnessed substantial put option trading volumes clustered around strike prices close to its current underlying value of ₹1,584.4. The most actively traded put options expiring on 27 January 2026 include strikes at ₹1,560, ₹1,570, ₹1,550, ₹1,540, and ₹1,500. Among these, the ₹1,560 strike saw the highest number of contracts traded at 2,394, generating a turnover of ₹178.35 lakhs and an open interest of 3,468 contracts. This is closely followed by the ₹1,570 strike with 1,928 contracts traded and a turnover of ₹174.58 lakhs.
The ₹1,550 strike price also attracted significant attention with 1,870 contracts traded and turnover exceeding ₹112 lakhs. Lower strikes such as ₹1,540 and ₹1,500 recorded 1,310 and 1,333 contracts traded respectively, with open interest at 1,542 and 2,684 contracts. This distribution of activity suggests that traders are positioning for potential downside protection or hedging in a range slightly below the current market price.
Market Context: Stock Performance and Sector Comparison
Reliance Industries has recently outperformed its oil sector peers, gaining 1.03% on the day compared to the sector’s 0.68% and the Sensex’s modest 0.15% rise. The stock has been on a positive trajectory for two consecutive days, delivering a cumulative return of 3.2%. It also hit a new 52-week high of ₹1,592.5 on the day, trading comfortably above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. This technical strength contrasts with the heavy put option activity, indicating that investors may be seeking downside protection amid recent gains.
However, investor participation appears to be moderating, with delivery volumes falling by 3.57% to 32.49 lakh shares on 31 December compared to the five-day average. Liquidity remains robust, with the stock capable of supporting trade sizes up to ₹20.73 crore based on 2% of the five-day average traded value, ensuring that option market activity is supported by a liquid underlying.
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Bearish Positioning or Strategic Hedging?
The concentration of put option open interest at strikes ranging from ₹1,500 to ₹1,570 suggests a cautious stance among market participants. While the stock’s fundamentals and technicals remain strong, the elevated put volumes may reflect hedging strategies by institutional investors or traders anticipating short-term volatility. The open interest at the ₹1,560 strike, standing at 3,468 contracts, is particularly noteworthy as it exceeds the open interest at other strikes, signalling a key level of interest for downside protection.
Put options serve as insurance against price declines, and the high turnover of ₹178.35 lakhs at the ₹1,560 strike indicates significant premium paid for this protection. Similarly, the ₹1,570 strike’s turnover of ₹174.58 lakhs and open interest of 1,985 contracts reinforce the view that traders are actively managing risk near current price levels. The slightly lower strikes at ₹1,540 and ₹1,500 also show meaningful open interest, suggesting layered hedging or speculative bearish bets.
Reliance’s Market Cap and Mojo Score Support Positive Outlook
Reliance Industries commands a formidable market capitalisation of ₹21,23,786 crore, categorising it firmly as a large-cap stock. Its recent upgrade in the MarketsMOJO grading system from Hold to Buy on 3 November 2025, with a Mojo Score of 70.0, reflects improved fundamentals and positive market sentiment. The company’s market cap grade remains at 1, indicating top-tier size and stability within the oil sector.
Despite the bearish undertones in the options market, the fundamental backdrop remains supportive. The upgrade in rating and strong technical positioning suggest that the put option activity may be more reflective of prudent risk management rather than outright negative sentiment. Investors should weigh these factors carefully when considering exposure to Reliance Industries.
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Expiry Patterns and Implications for Investors
The 27 January 2026 expiry date is a focal point for option traders, with the clustering of put option activity indicating that market participants are positioning ahead of this key date. Expiry weeks often bring heightened volatility as traders adjust or close positions, and the substantial open interest at multiple strikes suggests that Reliance Industries could experience price swings in the near term.
Investors should monitor the evolution of open interest and volume in the coming days to gauge whether the bearish positioning intensifies or unwinds. A sustained increase in put option open interest combined with declining stock prices would confirm a bearish trend, while a reduction in put volumes or a rise in call option activity could signal renewed bullishness.
Balancing Risk and Opportunity in Reliance Industries
Reliance Industries remains a cornerstone of the Indian oil sector, with strong fundamentals and a commanding market presence. The recent upgrade to a Buy rating by MarketsMOJO and the stock’s technical strength provide a positive backdrop for investors. However, the heavy put option activity ahead of the January expiry highlights the importance of risk management in current market conditions.
For investors, this means balancing the opportunity presented by Reliance’s growth prospects with the potential for short-term volatility. Utilising options strategies or closely monitoring derivatives market signals can provide valuable insights into market sentiment and help navigate the evolving landscape.
Conclusion
Reliance Industries Ltd’s prominence in put option trading ahead of the 27 January 2026 expiry underscores a nuanced market outlook. While the stock’s fundamentals and technicals remain robust, the surge in put volumes and open interest at strikes near the current price reflects cautious positioning and hedging by investors. This dynamic suggests that while optimism persists, market participants are preparing for possible near-term corrections or volatility.
As the expiry date approaches, close attention to option market trends and underlying stock performance will be essential for investors seeking to capitalise on Reliance’s long-term potential while managing downside risks effectively.
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