Reliance Industries Sees Heavy Put Option Activity Ahead of January Expiry

Put Option Activity Highlights

Data from the derivatives market reveals that Reliance Industries Ltd (NSE: RELIANCE) recorded significant volumes in put options expiring on 27 January 2026. The strike prices attracting the most interest are ₹1,410 and ₹1,400, closely aligned with the underlying stock price of ₹1,415.10 as of 22 January 2026.

At the ₹1,410 strike, 3,930 contracts were traded, generating a turnover of ₹1.72 crores and leaving an open interest of 3,196 contracts. Meanwhile, the ₹1,400 strike saw even heavier activity with 5,522 contracts traded, turnover of ₹1.60 crores, and a substantial open interest of 6,612 contracts. This concentration of put option volume and open interest near the current price level indicates a pronounced bearish sentiment or a strategic hedging stance among market participants.

Stock Performance and Technical Context

Reliance Industries has been gaining modestly over the past two days, delivering a cumulative return of 1.72%. However, the stock remains below its key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a lack of upward momentum in the short to medium term. The narrow trading range of ₹12.7 on 21 January 2026 further emphasises subdued volatility despite the active options market.

Investor participation has been rising, with delivery volumes reaching 85.68 lakh shares on 21 January, an 8.74% increase over the five-day average. Liquidity remains robust, supporting trade sizes up to ₹44.83 crores based on 2% of the five-day average traded value. This liquidity backdrop facilitates active options trading and allows for efficient price discovery in both the cash and derivatives segments.

Implications of Put Option Concentration

The heavy put option activity at strike prices just below the current market price suggests that investors are either positioning for a potential correction or seeking protection against downside risk. Put options serve as insurance for long stock holdings or as speculative bets on price declines. The elevated open interest at ₹1,400 strike, in particular, points to a significant number of contracts outstanding, which could influence price dynamics as expiry approaches.

Given Reliance’s large market capitalisation of ₹18,99,823 crores and its pivotal role in the oil sector, such options activity warrants close monitoring. The stock’s Mojo Score of 62.0 and a recent downgrade from Buy to Hold on 6 January 2026 reflect a cautious stance by analysts, possibly influenced by sectoral headwinds and valuation concerns.

Expiry Patterns and Market Sentiment

The 27 January expiry is attracting concentrated put option interest, which often precedes heightened volatility as traders adjust positions. The clustering of open interest near ₹1,400 and ₹1,410 strikes may create a price magnet effect, where the stock gravitates towards these levels as expiry nears due to unwinding of option positions and hedging flows.

Such expiry dynamics can lead to increased price swings, especially if the stock breaches these strike prices. Traders holding short puts may face assignment risk, while holders of long puts could benefit from downside moves. The interplay between these forces often shapes the stock’s price trajectory in the final days before expiry.

Sectoral and Broader Market Context

Reliance Industries operates within the oil sector, which has experienced mixed performance amid fluctuating crude prices and global economic uncertainties. The stock’s 1-day return of 0.73% slightly trails the sector’s 0.92% gain and the Sensex’s 0.96% rise, indicating relative underperformance. This divergence may be contributing to the cautious positioning observed in the options market.

Investors should weigh the company’s large-cap status and dominant market position against the technical signals and options market sentiment. The downgrade to a Hold rating by MarketsMOJO, with a Mojo Grade of 62.0, underscores the need for prudence and close monitoring of evolving market conditions.

Investor Takeaways and Outlook

For investors and traders, the pronounced put option activity in Reliance Industries signals a cautious market stance. Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate downside risk. Conversely, speculative traders might explore put options to capitalise on potential price corrections.

Given the stock’s current technical positioning below all major moving averages and the concentrated open interest near key strike prices, volatility is likely to increase as the 27 January expiry approaches. Monitoring open interest changes and price action around ₹1,400 to ₹1,410 will be critical for anticipating short-term directional moves.

While the company’s fundamentals remain robust, as reflected in its large market capitalisation and sector leadership, the recent downgrade to Hold and the cautious options market positioning suggest that investors should adopt a balanced approach, factoring in both growth prospects and near-term risks.

Conclusion

Reliance Industries Ltd’s heavy put option trading activity ahead of the 27 January expiry highlights a market environment marked by hedging and bearish sentiment. The concentration of open interest at strike prices just below the current market level underscores investor caution despite recent modest gains. As expiry nears, the stock’s price action will likely be influenced by options-related flows, making it essential for market participants to stay vigilant and adapt strategies accordingly.

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