Reliance Industries Sees Heavy Put Option Activity Ahead of December Expiry

Put Option Trading Overview

Data from the derivatives market reveals that Reliance Industries Ltd (NSE: RELIANCE) has witnessed substantial put option volumes for contracts expiring on 30 December 2025. The most traded strike prices are ₹1540, ₹1550, and ₹1560, all clustered near the stock’s current underlying value of ₹1567.0. Specifically, the ₹1560 strike saw 5,024 contracts traded, generating a turnover of approximately ₹3.09 crores, while the ₹1550 strike recorded 4,467 contracts with a turnover of ₹1.97 crores. The ₹1540 strike also attracted notable activity with 3,768 contracts traded and a turnover of ₹1.18 crores.

Open interest figures further underline the concentration of positions at these strikes. The ₹1550 strike holds the highest open interest at 4,994 contracts, followed by ₹1560 with 4,187 contracts and ₹1540 at 3,625 contracts. This clustering near the current market price suggests that market participants are positioning for potential downside protection or are expressing a cautious outlook on the stock’s near-term trajectory.

Market Context and Price Action

Reliance Industries is trading close to its 52-week high, just 0.91% shy of the peak level of ₹1581.3. The stock has outperformed its sector by 0.36% on the day, with a 1-day return of 1.48%, compared to the oil sector’s 1.10% and the Sensex’s 0.57%. The stock’s price is currently above all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating a generally positive technical backdrop.

However, delivery volumes tell a more nuanced story. On 18 December, the delivery volume stood at 33.88 lakh shares, which is 6.77% below the 5-day average delivery volume. This decline in investor participation could be interpreted as a sign of reduced conviction or a wait-and-watch stance ahead of the expiry. Liquidity remains robust, with the stock capable of supporting trade sizes up to ₹23.5 crores based on 2% of the 5-day average traded value.

Implications of Put Option Concentration

The concentration of put option activity near the current market price often signals a hedging approach by investors seeking to protect long positions against potential declines. Alternatively, it may indicate a more bearish sentiment, with traders speculating on a downward move in Reliance Industries’ share price before the December expiry.

Given the stock’s proximity to its 52-week high, the elevated put option volumes at strikes slightly below the market price could reflect a cautious stance amid broader market uncertainties or sector-specific factors affecting the oil industry. The open interest data suggests that these positions are not merely speculative but represent significant exposure that could influence price dynamics as expiry approaches.

Expiry Patterns and Market Sentiment

Options expiring on 30 December 2025 are attracting the bulk of activity, indicating that traders are focusing on the year-end horizon for their strategies. The clustering of put options at ₹1540 to ₹1560 strikes, just below the current price, may act as a psychological support zone, with market participants potentially expecting the stock to remain above these levels or preparing for downside scenarios.

Reliance Industries’ large market capitalisation of approximately ₹21.2 lakh crores and its status as a heavyweight in the oil sector mean that its price movements and derivatives activity often have broader market implications. The current option market positioning could be a reflection of wider concerns about commodity price volatility, regulatory developments, or global economic factors impacting the energy sector.

Technical and Fundamental Considerations

From a technical perspective, Reliance Industries’ trading above all major moving averages suggests underlying strength. However, the reduced delivery volumes and heavy put option interest imply that some investors are seeking downside protection or are hedging against potential volatility.

Fundamentally, Reliance remains a dominant player in the oil industry with diversified business interests. The stock’s recent performance relative to its sector and the broader market indicates resilience, yet the derivatives market activity points to a degree of caution among sophisticated investors.

Outlook for Investors

Investors tracking Reliance Industries should monitor the evolving derivatives landscape closely, especially as the December expiry date nears. The significant put option interest at strikes near the current price level may influence price volatility and provide insight into market expectations.

While the stock’s technical indicators remain positive, the derivatives data suggests that some market participants are adopting a defensive posture. This duality underscores the importance of a balanced approach when analysing Reliance Industries, considering both its strong fundamentals and the cautious positioning evident in options trading.

Overall, the heavy put option activity in Reliance Industries highlights a complex market environment where investors are weighing upside potential against downside risks, using options as a tool to manage exposure in a large-cap oil sector stock.

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