Reliance Industries Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

Data from the derivatives market reveals that Reliance Industries Ltd (NSE: RELIANCE) has emerged as the most active stock in put options trading, particularly for contracts expiring on 27 January 2026. The underlying stock closed at ₹1,429.80, with put options clustered around strike prices ranging from ₹1,380 to ₹1,450. Notably, the highest volume of contracts traded was at the ₹1,420 strike, with 9,891 contracts exchanged, followed closely by the ₹1,430 strike with 9,836 contracts.

These strike prices are positioned just below or near the current market price, indicating that traders are either hedging existing long positions or speculating on a potential downside move. The open interest figures corroborate this trend, with the ₹1,450 strike holding the largest open interest of 4,990 contracts, suggesting sustained bearish interest at this level.

Turnover and Market Implications

The turnover in these put options is substantial, with the ₹1,450 strike alone generating ₹882.16 lakhs in premium value, while the ₹1,430 and ₹1,440 strikes accounted for ₹880.81 lakhs and ₹784.66 lakhs respectively. This level of activity underscores a pronounced risk-off sentiment among market participants, who appear to be positioning for a potential correction or increased volatility in Reliance’s share price.

Such heavy put option trading often serves as a barometer for investor sentiment, especially when concentrated near the money strikes. It suggests that traders are either protecting profits from recent gains or anticipating a pullback in the near term.

Recent Price Performance and Technical Context

Reliance Industries has underperformed its oil sector peers, declining by 2.47% on the day and falling 2.02% over the past two sessions. The stock’s intraday low touched ₹1,418.60, marking a 2.7% drop from previous levels. This weakness is further highlighted by the stock trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a bearish technical setup.

Investor participation has risen notably, with delivery volumes on 16 January reaching 1.13 crore shares, a 70.87% increase over the five-day average. This heightened activity suggests that market participants are actively repositioning amid the recent volatility.

Mojo Score and Analyst Ratings

Reliance Industries currently holds a Mojo Score of 62.0, categorised as a 'Hold' rating, a downgrade from its previous 'Buy' grade as of 6 January 2026. This adjustment reflects a more cautious stance by analysts amid the recent price weakness and increased bearish option activity. The company’s market capitalisation stands at a robust ₹19,30,542.01 crore, affirming its status as a large-cap heavyweight in the oil sector.

Despite the downgrade, the stock remains liquid with a trading capacity of approximately ₹34.3 crore based on 2% of the five-day average traded value, ensuring that investors can enter or exit positions without significant market impact.

Expiry Patterns and Investor Behaviour

The concentration of put options expiring on 27 January 2026 suggests that investors are focusing on short-term downside protection or speculative opportunities. The clustering of open interest and volume around the ₹1,420 to ₹1,450 strikes indicates a key support zone that traders are monitoring closely. Should the stock breach these levels, it could trigger further downside momentum, amplified by option-related hedging flows.

Conversely, if Reliance manages to stabilise above these strikes, the heavy put option positions may act as a floor, limiting downside risk in the immediate term.

Sector and Market Comparison

Reliance’s 1-day return of -2.15% has underperformed the oil sector’s -1.65% and the broader Sensex’s -0.52% decline, highlighting relative weakness. This underperformance, combined with the technical and options market signals, suggests that investors are factoring in sector-specific headwinds or company-specific concerns.

Given the oil sector’s sensitivity to global commodity prices and geopolitical developments, the increased put option activity may also reflect hedging against broader market uncertainties rather than purely company-specific risks.

Investor Takeaways

For investors and traders, the current put option activity in Reliance Industries serves as a critical signal to reassess risk exposure. The heavy volumes and open interest near the money strikes suggest that downside protection is being prioritised, possibly in anticipation of near-term volatility or a correction.

Those holding long positions may consider hedging strategies or closely monitoring the ₹1,420 to ₹1,450 support zone. Meanwhile, speculative traders might view the elevated put option premiums as an opportunity to capitalise on potential price swings.

It is also prudent to keep an eye on broader oil sector developments and macroeconomic indicators that could influence Reliance’s performance in the coming weeks.

Conclusion

Reliance Industries Ltd’s pronounced put option activity ahead of the 27 January expiry highlights a shift towards cautious or bearish sentiment among market participants. Coupled with recent price declines and technical weakness, this trend underscores the importance of vigilant risk management for investors in this large-cap oil sector leader. While the stock’s fundamentals remain strong, the near-term outlook appears clouded by uncertainty, as reflected in the derivatives market positioning.

Market participants should continue to monitor option market dynamics alongside price action to gauge evolving investor sentiment and potential inflection points for Reliance Industries.

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