Reliance Industries Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

Reliance Industries Ltd (NSE: RELIANCE), a heavyweight in the oil sector with a market capitalisation exceeding ₹20 lakh crores, has emerged as the most active stock in put options trading for the upcoming expiry on 27 January 2026. The underlying stock closed at ₹1,526.20, but put contracts have been heavily concentrated at strike prices both below and slightly above the current market level, indicating a cautious stance among traders.

Notably, the 1,510 strike price put option saw the highest volume with 5,305 contracts traded, generating a turnover of ₹453.05 lakhs and an open interest of 882 contracts. This is closely followed by the 1,450 strike price with 4,405 contracts traded and an open interest of 2,588, and the 1,480 strike price with 3,892 contracts traded and 1,402 open interest. The 1,570 strike price put option, which is above the current market price, recorded 3,629 contracts traded with a substantial turnover of ₹786.95 lakhs and an open interest of 1,787 contracts. The 1,400 strike price also attracted 3,408 contracts with an open interest of 1,951.

The clustering of put option volumes around these strike prices suggests investors are positioning for potential downside or hedging existing long positions. The elevated open interest at 1,450 and 1,570 strikes further underscores the significance of these levels as key support and resistance zones in the near term.

Market Performance and Technical Context

Reliance Industries has underperformed its sector, the Oil Exploration and Refineries segment, which itself declined by 2.22% on the day. The stock fell 3.12% on 6 January 2026, touching an intraday low of ₹1,517.80, marking a consecutive two-day decline with a cumulative loss of 3.78%. This underperformance is notable against the Sensex’s modest 0.20% drop, highlighting sector-specific pressures.

Technical indicators reveal a mixed picture. The stock trades above its 50-day, 100-day, and 200-day moving averages, signalling a longer-term uptrend. However, it remains below its 5-day and 20-day moving averages, reflecting short-term weakness and potential consolidation. The weighted average price for the day was closer to the low, indicating selling pressure during the session.

Investor participation has risen sharply, with delivery volumes on 5 January reaching 61.27 lakh shares, a 62.95% increase over the five-day average. This heightened activity suggests that market participants are actively adjusting positions amid the recent volatility.

Fundamental and Rating Overview

Reliance Industries maintains a robust fundamental profile, reflected in its MarketsMOJO Mojo Score of 70.0 and a Mojo Grade upgrade from Hold to Buy as of 3 November 2025. The company’s market cap grade is 1, indicating its status as a large-cap stock with strong market presence and liquidity. Despite recent price weakness, the upgrade signals confidence in the company’s medium to long-term prospects, supported by its diversified business model spanning oil refining, petrochemicals, retail, and digital services.

However, the current bearish sentiment in options markets suggests investors are wary of near-term headwinds, possibly linked to global oil price volatility, regulatory challenges, or profit booking after recent gains. The put-heavy positioning may also serve as a hedge against broader market uncertainties, given Reliance’s significant weighting in major indices.

Expiry Patterns and Investor Behaviour

The concentration of put option activity around the 27 January 2026 expiry date is a critical factor. This expiry is the first major options expiry of the new calendar year, often accompanied by increased volatility as traders roll over positions or adjust hedges. The high turnover and open interest in put options at multiple strike prices indicate active risk management and speculative positioning.

Investors appear to be balancing between protection and opportunistic short bets. The strike prices chosen—ranging from ₹1,400 to ₹1,570—cover a broad spectrum around the current price, suggesting uncertainty about the stock’s immediate direction. The elevated open interest at the 1,450 strike, in particular, may act as a psychological support level, with traders expecting the stock to hold above this mark or using it as a reference for downside risk.

Implications for Investors

For investors, the surge in put option volumes on Reliance Industries signals a cautious approach to the stock’s near-term outlook. While the fundamental Buy rating remains intact, the technical weakness and bearish options positioning suggest that downside risks cannot be ignored. Traders holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate potential losses.

Conversely, speculative investors might view the elevated put activity as an opportunity to capitalise on volatility, either through short-term bearish trades or by selling puts at strike prices where they expect the stock to remain above expiry. The liquidity of the stock, with a trading capacity of approximately ₹24.36 crore based on recent volumes, supports active options trading without significant market impact.

Sector-wise, the oil exploration and refinery segment’s recent decline of 2.22% adds to the pressure on Reliance, which is a bellwether stock for the industry. Global oil price fluctuations, geopolitical tensions, and domestic regulatory developments will continue to influence investor sentiment and option market dynamics in the coming weeks.

Conclusion

Reliance Industries Ltd’s heavy put option activity ahead of the 27 January 2026 expiry reflects a nuanced market stance combining hedging and bearish speculation. Despite a strong fundamental backdrop and a recent upgrade to a Buy rating, the stock faces short-term headwinds as indicated by technical signals and options market positioning. Investors should closely monitor price action around key strike prices, particularly ₹1,450 and ₹1,510, to gauge the evolving risk-reward profile.

As the expiry approaches, volatility is expected to remain elevated, offering both challenges and opportunities for market participants. A balanced approach incorporating fundamental analysis, technical trends, and options market insights will be essential for navigating Reliance’s stock in the current environment.

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