Reliance Industries Sees Heavy Put Option Activity Ahead of January Expiry

Put Option Activity Highlights

On 23 January 2026, Reliance Industries Ltd (NSE: RELIANCE) emerged as the most active stock in put options, with 3,255 contracts traded at the ₹1,400 strike price expiring on 27 January 2026. This activity generated a turnover of ₹141.10 lakhs and an open interest of 5,272 contracts, underscoring significant investor interest in downside protection or speculative bearish bets.

The underlying stock price currently stands at ₹1,400, exactly matching the strike price where the bulk of put options have been concentrated. This alignment suggests that traders are positioning for potential downside moves or volatility around this critical price level in the coming days.

Market Context and Price Performance

Reliance Industries, a heavyweight in the oil sector with a market capitalisation of approximately ₹18.96 lakh crores, has been under pressure recently. The stock has declined by 0.11% on the day, slightly underperforming the oil sector’s 0.09% fall and contrasting with the broader Sensex’s modest 0.04% gain. Notably, the stock has been losing ground for the past day, with a narrow trading range of ₹7.6, indicating subdued volatility but persistent selling pressure.

Technical indicators reveal that Reliance is trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a bearish trend across multiple timeframes. This technical weakness is likely contributing to the increased put option interest as investors seek to hedge or capitalise on further declines.

Investor participation appears to be waning, with delivery volumes on 22 January falling by 12.06% compared to the five-day average, registering 73.53 lakh shares. Despite this, liquidity remains adequate, with the stock’s traded value supporting sizeable transactions up to ₹48.85 crore without significant market impact.

Investor Sentiment and Hedging Implications

The concentration of put options at the ₹1,400 strike price, coinciding with the current market price, suggests that investors are either hedging existing long positions or speculating on a near-term decline. The open interest of 5,272 contracts indicates that a sizeable number of traders are committed to this bearish stance, potentially anticipating volatility or a correction in the oil sector.

Reliance’s Mojo Score currently stands at 62.0, with a Mojo Grade of Hold, downgraded from Buy on 6 January 2026. This downgrade reflects a reassessment of the stock’s fundamentals and technical outlook, signalling caution among analysts and investors alike. The company retains a Market Cap Grade of 1, confirming its status as a large-cap stock with significant market influence.

Given the stock’s underperformance relative to its sector and the broader market, the increased put option activity may also be a response to macroeconomic factors impacting the oil industry, including fluctuating crude prices, regulatory developments, and global demand uncertainties.

Expiry Patterns and Future Outlook

The expiry date of 27 January 2026 is critical, as it marks the settlement of these put options and could trigger increased volatility depending on the stock’s price movement. Traders holding these puts may exercise them if the stock closes below ₹1,400, or alternatively, close their positions if the stock stabilises or rallies.

Historical patterns show that Reliance’s option expiry dates often coincide with heightened trading volumes and price swings, as market participants adjust their positions. The current scenario suggests a cautious outlook, with investors preparing for potential downside risk or market turbulence in the near term.

Strategic Considerations for Investors

For investors holding long positions in Reliance Industries, the surge in put option activity serves as a cautionary signal to reassess risk exposure. The stock’s technical weakness and recent downgrade suggest that downside risks may be materialising, warranting protective measures such as stop-loss orders or option hedges.

Conversely, traders with a bearish outlook may view the current environment as an opportunity to capitalise on potential declines through put options or short positions. The liquidity and active options market in Reliance provide ample scope for tactical trades around the upcoming expiry.

Long-term investors should monitor fundamental developments closely, including quarterly earnings, crude oil price trends, and regulatory changes, which could influence the stock’s trajectory beyond the immediate expiry horizon.

Conclusion

The pronounced activity in Reliance Industries’ put options ahead of the 27 January expiry highlights a growing bearish sentiment and hedging demand among market participants. Trading volumes and open interest at the ₹1,400 strike price reflect a critical juncture for the stock, which is currently navigating technical headwinds and a recent downgrade in analyst ratings.

While the oil sector remains volatile amid global uncertainties, Reliance’s large-cap stature and market influence mean that its price movements will continue to attract significant attention from investors and traders alike. Careful monitoring of option expiry dynamics and underlying price action will be essential for making informed investment decisions in the coming weeks.

Unlock special upgrade rates for a limited period. Start Saving Now →