Reliance Industries Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

Data from the derivatives market indicates that Reliance Industries Ltd (stock code 605152) has been the most active stock in put options trading, with two strike prices drawing substantial interest. The 1500 strike price put options saw the highest volume, with 3,899 contracts traded, generating a turnover of ₹552.88 lakhs and an open interest of 7,535 contracts. Close behind, the 1490 strike price put options recorded 2,002 contracts traded, ₹238.54 lakhs in turnover, and an open interest of 1,670 contracts. The underlying stock price at the time stood at ₹1,494.10, placing these strike prices near-the-money and reflecting a strategic focus on downside protection or speculative bearish bets.

Expiry Patterns and Market Implications

The expiry date of 27 January 2026 is pivotal, as traders position themselves ahead of this deadline. The concentration of put option activity at the 1490 and 1500 strike prices suggests that market participants are anticipating potential declines or increased volatility in Reliance’s share price in the short term. Open interest figures reinforce this view, with the 1500 strike price showing a particularly high level of outstanding contracts, indicating sustained bearish interest or hedging demand.

Stock Performance and Technical Context

Reliance Industries has been under pressure recently, with the stock falling for four consecutive sessions, resulting in a cumulative decline of 6.12%. On 8 January 2026, the stock recorded a day change of -0.73%, slightly underperforming the Sensex’s modest fall of -0.17% but performing in line with the oil sector’s -0.90% decline. The stock has traded within a narrow range of ₹12.8, reflecting subdued volatility despite the bearish undertones in options trading.

Technically, Reliance’s share price remains above its 100-day and 200-day moving averages, signalling longer-term support. However, it is trading below the 5-day, 20-day, and 50-day moving averages, indicating short-term weakness and potential downward momentum. Rising investor participation is evident, with delivery volumes on 7 January reaching 71.11 lakh shares, a 14.16% increase over the five-day average, suggesting active trading interest despite the recent price softness.

Mojo Score and Market Capitalisation

Reliance Industries holds a Mojo Score of 62.0, categorised as a Hold, reflecting a cautious stance by analysts. This represents a downgrade from a previous Buy rating issued on 6 January 2026. The company’s market capitalisation stands at a formidable ₹20,22,021.50 crore, underscoring its status as a large-cap heavyweight within the oil sector. The Market Cap Grade is rated 1, indicating top-tier market capitalisation among its peers.

Investor Sentiment and Hedging Strategies

The surge in put option volumes and open interest at near-the-money strikes indicates that investors are increasingly adopting hedging strategies to protect against further downside or are speculating on a decline in Reliance’s share price. This behaviour is typical in periods of uncertainty or when technical indicators suggest weakening momentum. The relatively high turnover in these put options, amounting to over ₹7.9 crore combined, highlights the significant capital allocation towards downside protection.

Sectoral and Broader Market Context

Reliance’s performance and option market activity must be viewed within the broader oil sector and market environment. The oil sector has experienced volatility due to fluctuating crude prices, regulatory developments, and global economic factors. Reliance’s stock, while large and liquid, is not immune to these influences. The sector’s 1-day return of -0.90% on 8 January 2026 reflects these pressures, marginally exceeding Reliance’s own decline, suggesting that the company’s relative performance remains in line with sector trends.

Outlook and Analyst Perspectives

With the downgrade to a Hold rating and a Mojo Score of 62.0, analysts appear to be adopting a more cautious outlook on Reliance Industries. The downgrade on 6 January 2026 signals concerns about near-term headwinds or valuation pressures. Investors should monitor upcoming earnings reports, crude oil price movements, and macroeconomic indicators that could influence the stock’s trajectory. The active put option interest may also serve as an early warning of increased volatility or a potential correction.

Conclusion: Navigating Cautious Waters

Reliance Industries Ltd’s recent option market activity, combined with its technical and fundamental indicators, suggests a phase of cautious investor sentiment. The heavy put option volumes at strike prices just below and at the current market price reflect a hedging emphasis and a bearish tilt among traders. While the company’s large-cap status and long-term fundamentals remain robust, near-term volatility and sectoral headwinds warrant careful monitoring.

Investors should weigh the implications of the recent downgrade and the technical signals against their portfolio objectives and risk tolerance. The evolving derivatives landscape offers valuable insights into market expectations and can serve as a guide for positioning in Reliance Industries Ltd as the 27 January expiry approaches.

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