Reliance Industries Sees Heavy Put Option Activity Amid Bearish Market Sentiment

Put Option Surge Highlights Investor Caution

On 27 February 2026, Reliance Industries emerged as the most active stock in put options trading, with 2,514 contracts exchanged at the ₹1,400 strike price expiring on 30 March 2026. This activity generated a turnover of ₹393.44 lakhs and an open interest of 4,871 contracts, underscoring a pronounced bearish bias or protective hedging among market participants. The underlying stock price stood at ₹1,393, just below the strike price, indicating that investors are positioning for potential downside or volatility in the near term.

The put option volume and open interest levels are notable given Reliance’s stature as a large-cap heavyweight with a market capitalisation of ₹19,05,372 crores. Such concentrated put activity often signals either speculative bets on a price decline or institutional hedging against adverse price movements.

Price Performance and Technical Indicators Paint a Bearish Picture

Reliance Industries underperformed its sector by 0.41% on the day, with a 1-day return of -0.98%, lagging behind the oil sector’s -0.65% and the Sensex’s -0.54%. The stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — which typically signals a downtrend or weak momentum. This technical backdrop aligns with the increased put option interest, suggesting that investors are bracing for further downside or volatility.

Investor participation has also risen sharply, with delivery volumes hitting 60.71 lakh shares on 26 February, a 44.77% increase over the 5-day average. This heightened activity indicates that market participants are actively adjusting their positions, possibly in response to evolving macroeconomic or sector-specific factors.

Liquidity and Trade Size Support Active Options Market

Reliance’s liquidity remains robust, with the stock’s traded value supporting trade sizes up to ₹34.49 crores based on 2% of the 5-day average traded value. This liquidity facilitates the active options trading observed, enabling institutional and retail investors to execute sizeable hedging or speculative strategies without significant market impact.

Mojo Score Downgrade Reflects Growing Concerns

Reliance Industries’ Mojo Score currently stands at 47.0, with a Mojo Grade of Sell, downgraded from Hold on 25 February 2026. This downgrade reflects deteriorating fundamentals or technical signals as assessed by MarketsMOJO’s proprietary analytics. The market cap grade remains at 1, indicating the company’s large-cap status but also signalling limited upside potential in the near term according to the scoring model.

The downgrade and bearish options activity together suggest that investors are increasingly cautious about Reliance’s near-term prospects, possibly due to sector headwinds such as fluctuating crude oil prices, regulatory challenges, or broader macroeconomic uncertainties impacting the oil industry.

Expiry Patterns and Strike Price Concentration

The concentration of put option trades at the ₹1,400 strike price, close to the current underlying value, is significant. It indicates that investors are targeting a key support level or are hedging against a drop below this threshold. The expiry date of 30 March 2026 is just over a month away, suggesting that traders expect potential volatility or price movement within this timeframe.

Such expiry patterns often coincide with quarterly results, policy announcements, or global oil market developments, which can act as catalysts for price swings. The open interest of 4,871 contracts at this strike price also points to a sizeable pool of investors holding bearish or protective positions.

Sector and Market Context

The oil sector has faced mixed pressures recently, with global crude prices fluctuating amid geopolitical tensions and demand concerns. Reliance, as a dominant player, is naturally sensitive to these dynamics. Its underperformance relative to the sector and benchmark indices highlights the challenges it faces in maintaining momentum.

Investors should weigh the increased put option activity and technical weakness against the company’s long-term fundamentals and strategic initiatives. While short-term bearish sentiment is evident, Reliance’s diversified business model and scale remain key strengths.

Investor Takeaways and Outlook

For investors, the heavy put option activity in Reliance Industries signals a cautious stance in the near term. Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate downside risk. Conversely, traders with a bearish outlook might view the current option volumes as confirmation of a potential price correction.

It is also important to monitor upcoming corporate announcements, global oil price trends, and macroeconomic indicators that could influence Reliance’s stock trajectory. The technical weakness and downgrade in Mojo Grade suggest that the stock may face headwinds before stabilising or recovering.

Overall, Reliance Industries remains a key bellwether for the oil sector, and its options market activity provides valuable insights into investor sentiment and risk management approaches.

Conclusion

The surge in put option trading at the ₹1,400 strike price for expiry on 30 March 2026 highlights a growing bearish sentiment or hedging demand in Reliance Industries Ltd. Coupled with technical underperformance and a recent downgrade in Mojo Grade to Sell, the stock is currently navigating a challenging phase. Investors should carefully analyse these signals alongside fundamental factors before making portfolio decisions.

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