Reliance Industries Sees Heavy Put Option Activity Amid Bearish Hedging

Put Option Activity Highlights

On the expiry date of 24 Feb 2026, Reliance Industries Ltd (NSE: RELIANCE) recorded the highest put option volumes among large-cap stocks, with two strike prices dominating the activity. The 1400 strike put saw 3,098 contracts traded, generating a turnover of ₹10.69 lakhs and an open interest of 8,313 contracts. Meanwhile, the 1430 strike put recorded 2,864 contracts traded, with a turnover of ₹91.08 lakhs and an open interest of 1,388 contracts. The underlying stock price stood at ₹1,431.90, placing these strikes close to the money and indicating active hedging or bearish bets near current levels.

The substantial open interest at the 1400 strike, which is slightly below the current market price, suggests that traders are positioning for a potential downside or are protecting long stock holdings against a moderate decline. The 1430 strike’s high turnover but relatively lower open interest points to fresh put buying or short-term speculative activity ahead of expiry.

Stock Performance and Market Context

Reliance Industries has outperformed its sector by 0.56% on the day, delivering a 0.89% gain compared to the oil sector’s 0.35% and the Sensex’s 0.64%. The stock has been on a two-day winning streak, rising 1.67% over this period, yet it remains below its 50-day, 100-day, and 200-day moving averages. It trades above its 5-day and 20-day averages, reflecting short-term strength amid longer-term consolidation.

Investor participation appears to be waning slightly, with delivery volumes on 20 Feb falling by 5.35% against the five-day average, despite a healthy liquidity profile supporting trade sizes up to ₹25.45 crores. This mixed technical picture may be encouraging cautious positioning through options, as market participants hedge against potential volatility near expiry.

Reliance’s Market Standing and Mojo Rating

Reliance Industries Ltd remains a heavyweight in the oil sector with a market capitalisation of ₹19,37,849.55 crores, categorised as a large-cap stock. Its current Mojo Score stands at 62.0, reflecting a Hold rating, which was downgraded from Buy on 6 Jan 2026. The downgrade signals a tempered outlook amid evolving market conditions, possibly influencing the increased put option interest as investors reassess risk-reward dynamics.

Expiry Patterns and Investor Sentiment

The expiry on 24 Feb 2026 is shaping up as a critical juncture for Reliance Industries. The concentration of put option open interest near the current price level suggests that investors are hedging against a possible pullback or volatility spike. This is consistent with the stock’s recent narrow trading range of ₹11.9, which may be signalling consolidation ahead of a directional move.

Put options are often used as insurance by long holders or as speculative bets by bearish traders. The elevated volumes and open interest at the 1400 strike imply that many market participants are either protecting profits or positioning for a downside correction. Given the stock’s recent outperformance relative to the oil sector and the broader market, this cautious stance is understandable.

Technical Indicators and Moving Averages

Reliance’s price action above the 5-day and 20-day moving averages indicates short-term momentum, but the stock remains below its longer-term averages, which may act as resistance. This technical setup often leads to increased option activity as traders seek to hedge or capitalise on potential breakouts or reversals.

The falling delivery volumes suggest a slight reduction in committed investor participation, which could increase volatility around expiry. This environment typically favours option strategies that provide downside protection or speculative leverage, explaining the surge in put option interest.

Implications for Investors and Traders

For investors, the heavy put option activity at strike prices just below and near the current market price signals a cautious approach to Reliance Industries. While the stock has shown resilience and outperformed its sector recently, the downgrade to a Hold rating and the technical resistance levels suggest that upside may be limited in the near term.

Traders may view the elevated put volumes as an opportunity to implement hedging strategies or to speculate on a short-term correction. The liquidity in both the stock and its options market supports sizeable trades, making Reliance a focal point for expiry-related volatility.

Given the stock’s large market capitalisation and sector leadership, movements in Reliance often influence broader market sentiment, especially within the oil sector. Monitoring the evolution of open interest and volume in the coming days will be crucial for gauging investor conviction and potential price direction.

Conclusion

Reliance Industries Ltd’s prominent position in put option trading ahead of the 24 Feb 2026 expiry reflects a nuanced market outlook. Despite recent gains and sector outperformance, investors are hedging against downside risks amid technical resistance and a recent rating downgrade. This dynamic underscores the importance of cautious positioning and vigilant monitoring of option market signals for those invested in or trading Reliance.

As expiry approaches, the interplay between short-term momentum and longer-term resistance will likely dictate price action, with put option activity serving as a key barometer of market sentiment and risk appetite.

Limited Period Only. Start at Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Get 71% Off →