Rs 1,300 Puts — 4.3% Below Current Price — Draw 3,431 Contracts on Reliance Industries Ltd

Put Options Event and Cash Market Context

The 26 May 2026 expiry saw significant put option turnover in Reliance Industries Ltd, with the Rs 1,300 strike registering 3,431 contracts traded and an open interest of 4,479 contracts. Nearby strikes such as Rs 1,310 and Rs 1,350 also showed heavy activity, with 3,800 and 4,122 contracts traded respectively. The total turnover for these strikes ranged from ₹30.5 lakhs to ₹203.8 lakhs, indicating substantial liquidity and interest in put options at these levels.

The underlying stock closed at Rs 1,358.50, marginally down by 0.22% on the day, and hovering close to its 52-week low of Rs 1,290, just 4.99% away. The stock is trading above its 5-day moving average but remains below the 20-day, 50-day, 100-day, and 200-day averages, reflecting a mixed technical picture. Delivery volumes have declined by 29.44% against the 5-day average, signalling reduced investor participation in the cash market. Is this decline in delivery volume a sign of weakening conviction behind the recent price moves?

Strike Price Analysis: Moneyness and Intent

The Rs 1,300 strike is approximately 4.3% out-of-the-money (OTM) relative to the current price of Rs 1,358.50. Other active strikes such as Rs 1,310 and Rs 1,350 are closer to at-the-money (ATM) territory, with Rs 1,350 just 0.6% below the spot price. The Rs 1,360 strike, slightly in-the-money (ITM) by about Rs 1.5, also saw 3,299 contracts traded.

OTM puts like the Rs 1,300 strike are often purchased as protective hedges by investors holding long positions, especially when the underlying is trading near support levels. The Rs 1,300 strike lies near a technical support zone, given the proximity to the 52-week low and the cluster of moving averages above the current price. This suggests that some put buyers may be seeking downside protection rather than outright bearish bets. Are these put contracts a hedge against a potential pullback or a directional bearish position?

Interpreting the Put Activity: Multiple Perspectives

Put option activity can signal different strategies depending on the strike price, open interest, and cash market context. Three main interpretations are plausible here:

• Protective Hedging: OTM puts at Rs 1,300 and Rs 1,310 may be bought by investors to guard against a downside correction, especially as the stock trades near key support levels. The stock’s recent sideways to slightly negative price action supports this view.
• Directional Bearish Positioning: ATM and ITM puts at Rs 1,350 and Rs 1,360 could indicate bearish bets anticipating a near-term decline. However, the relatively small daily price change and the stock’s position above the 5-day moving average temper this interpretation.
• Put Writing (Bullish Bet): Some put contracts may be sold to collect premium, reflecting a bullish or neutral stance. The open interest figures, particularly the ratio of contracts traded to open interest, provide clues about fresh positioning versus rollovers.

Given the stock’s modest decline of 0.22% on the day and its position relative to moving averages, the protective hedging interpretation appears most consistent with the data. The Rs 1,300 strike’s open interest of 4,479 contracts and turnover of ₹30.5 lakhs suggest active fresh buying, while the Rs 1,350 strike’s higher turnover and open interest may reflect a mix of hedging and speculative positioning.

Open Interest and Contracts Analysis

The ratio of contracts traded to open interest offers insight into whether the activity represents fresh positioning or adjustments to existing positions. For the Rs 1,300 strike, 3,431 contracts traded against an open interest of 4,479, a ratio of approximately 0.77, indicating a significant but not overwhelming level of fresh activity.

At the Rs 1,350 strike, 4,122 contracts traded with an open interest of 4,856, a similar ratio of 0.85. The Rs 1,310 strike shows a lower open interest of 1,409 against 3,800 contracts traded, a ratio of 2.7, signalling very fresh positioning at this strike. This suggests a mix of new hedging and speculative activity across strikes, with the Rs 1,310 strike particularly noteworthy for fresh put buying.

Cash Market Context: Technicals and Delivery Volumes

Reliance Industries Ltd is trading above its 5-day moving average but remains below longer-term averages, indicating short-term resilience amid broader weakness. The stock’s proximity to its 52-week low and the recent decline in delivery volumes by 29.44% against the 5-day average suggest cautious investor participation.

The Rs 1,300 put strike aligns closely with a support zone near the 52-week low, reinforcing the likelihood that put buyers are seeking protection against a pullback rather than signalling outright bearish conviction. Does this technical setup favour hedging over directional bearish bets?

Delivery Volume and Market Participation

Delivery volumes on 20 May stood at 72.69 lakh shares, down 29.44% from the 5-day average, indicating a decline in investor participation despite the stock’s relatively stable price. This thinning of delivery-backed trading may be a factor prompting investors to hedge their positions with puts, as the rally or stability lacks strong conviction from long-term holders.

Conclusion: Protective Hedging Most Likely

The put option activity in Reliance Industries Ltd ahead of the 26 May expiry reveals a complex picture. The concentration of contracts at strikes slightly below the current price, combined with the stock’s technical positioning and subdued delivery volumes, suggests that much of the put buying is likely protective hedging rather than outright bearish speculation.

While some ATM and ITM put activity could reflect cautious bearish bets, the overall data points to investors seeking insurance against a potential pullback rather than expecting a sharp decline. Put writing activity appears limited given the open interest ratios, reducing the likelihood of a bullish put-selling strategy dominating the scene.

With puts active and calls active on the same stock, buy, sell, or hold Reliance Industries Ltd? The full analysis cuts through the options noise.

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