Reliance Industries Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

Data from the options market reveals that Reliance Industries Ltd (stock code 605152) has emerged as the most active stock in put options trading, with two key strike prices dominating investor interest. The 1400 strike price saw 4,036 contracts traded, generating a turnover of ₹185.66 lakhs and an open interest of 6,596 contracts. Meanwhile, the 1410 strike price recorded 3,585 contracts traded, with a turnover of ₹234.28 lakhs and an open interest of 3,082 contracts. Both strike prices are closely aligned with the underlying stock price, which stood at ₹1410 on 20 January 2026.

This concentrated activity in near-the-money put options suggests that market participants are positioning for potential downside or seeking protection against further declines. The expiry date of 27 January 2026 adds urgency to these trades, as investors adjust their hedges or speculative bets ahead of the weekly options expiry.

Stock Performance and Technical Context

Reliance Industries has been under pressure recently, recording a three-day consecutive fall that culminated in a 3.4% decline over this period. On 20 January, the stock closed down by 0.36%, slightly outperforming the sector’s 0.81% fall but lagging the Sensex’s 0.50% decline. The stock’s trading range has narrowed to just ₹10.4, indicating subdued volatility despite the bearish undertone.

Technically, Reliance is trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a sustained downtrend. This technical weakness likely contributes to the increased demand for put options as investors seek downside protection or speculate on further price erosion.

Investor Participation and Liquidity

Investor engagement remains robust, with delivery volumes on 19 January rising sharply by 75.94% compared to the five-day average, reaching 1.11 crore shares. This heightened participation underscores active interest in the stock despite recent losses. Liquidity metrics also support sizeable trades, with the stock’s liquidity sufficient to accommodate trade sizes of up to ₹41.13 crore based on 2% of the five-day average traded value.

Mojo Score and Analyst Ratings

Reliance Industries currently holds a Mojo Score of 62.0, categorised as a 'Hold' rating, reflecting a cautious stance by analysts. This represents a downgrade from a previous 'Buy' rating assigned on 6 January 2026. The downgrade aligns with the recent price weakness and technical deterioration. Despite its large market capitalisation of ₹19,12,476 crore, the stock’s market cap grade remains at 1, indicating it is a heavyweight in the oil sector but currently facing headwinds.

Implications of Put Option Activity

The surge in put option volumes and open interest at strike prices near the current market level is a clear indication of increased bearish sentiment or hedging demand. Investors may be seeking to protect long positions against further downside or speculating on a correction given the stock’s recent underperformance and technical weakness.

Open interest of 6,596 contracts at the 1400 strike price is particularly noteworthy, as it suggests a significant number of investors are either shorting the stock or hedging existing exposure. The turnover figures, exceeding ₹400 lakhs combined for these two strikes, highlight the substantial capital flowing into downside protection strategies.

Expiry Patterns and Market Outlook

With the 27 January expiry approaching, traders are likely to adjust their positions in the coming days, which could lead to increased volatility. The narrow trading range observed recently may give way to sharper moves as option expiry dynamics come into play. Investors should monitor open interest changes and price action closely to gauge the evolving market sentiment.

Sector-wise, Reliance’s performance is inline with the broader oil sector, which has also faced pressure amid global energy market uncertainties. The stock’s relative outperformance versus the sector on 20 January suggests some resilience, but the technical and options data point to caution in the near term.

Investor Takeaway

For investors and traders, the current landscape suggests a cautious approach towards Reliance Industries. The heavy put option activity near the current price level signals that market participants are bracing for potential downside or are actively hedging existing positions. The technical indicators reinforce this cautious stance, with the stock trading below all key moving averages and exhibiting a recent downtrend.

However, the stock’s large market capitalisation and sector leadership mean it remains a key player in the oil industry, and any recovery in global energy markets or positive corporate developments could quickly shift sentiment. Monitoring option open interest and volume trends alongside price action will be critical in assessing the stock’s near-term trajectory.

In summary, Reliance Industries is currently navigating a phase of heightened bearish positioning as reflected in the options market, combined with technical weakness and increased investor participation. This confluence of factors warrants close attention from market participants seeking to manage risk or capitalise on potential opportunities in this large-cap oil stock.

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