Reliance Industries Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On 27 January 2026, Reliance Industries Ltd (NSE: RELIANCE) emerged as the most active stock in put options, with the 1400 strike price put contracts dominating trading volumes. A total of 2,050 contracts were traded, generating a turnover of ₹315.19 lakhs. Open interest at this strike stands at 5,925 contracts, underscoring sustained investor interest in downside protection or speculative bearish bets.

The underlying stock price closed near ₹1,397.5, just below the 1400 strike, indicating that the put options are positioned close to the money. This proximity often reflects a strategic hedging stance or anticipation of a potential price decline in the near term.

Stock Performance and Technical Context

Reliance Industries underperformed its Oil Exploration and Refinery sector by 0.69% on the day, despite the sector gaining 2.28%. The stock touched an intraday high of ₹1,409.9, a 2.13% rise, signalling some short-term buying interest after three consecutive days of decline. However, the price remains below its 20-day, 50-day, 100-day, and 200-day moving averages, suggesting that the medium- to long-term trend remains under pressure.

Notably, the stock is trading above its 5-day moving average, which may indicate a tentative short-term reversal or consolidation phase. Delivery volumes surged to 1.99 crore shares, a 155.46% increase compared to the five-day average, reflecting rising investor participation and liquidity. The stock’s liquidity supports sizeable trade volumes, with a 2% threshold of the five-day average traded value equating to approximately ₹48.8 crore, facilitating active options and equity trading.

Mojo Score and Market Capitalisation

Reliance Industries holds a Market Capitalisation Grade of 1, reflecting its status as a large-cap heavyweight with a market cap of ₹18,91,703.83 crore. The company’s Mojo Score currently stands at 62.0, categorised as a Hold, following a downgrade from Buy on 6 January 2026. This adjustment reflects a more cautious outlook amid recent price volatility and sector headwinds.

Investor Sentiment and Hedging Implications

The surge in put option volumes at the 1400 strike price suggests that investors are either hedging existing long positions or speculating on a potential downside move. Given the stock’s recent underperformance relative to its sector and the broader Sensex, which gained 0.52% on the same day, the options market is signalling a cautious stance.

Put options serve as insurance against price declines, and the elevated open interest indicates that market participants are actively positioning for volatility or a correction. This is particularly relevant given the stock’s technical positioning below key moving averages, which often act as resistance levels.

Expiry Patterns and Market Outlook

The 24 February 2026 expiry date is attracting significant attention, with the 1400 strike put options being the focal point. This expiry is less than a month away, and the concentration of open interest at this strike price may influence price dynamics as the date approaches. Traders often adjust their positions to manage risk or capitalise on expected price movements around expiry.

Reliance’s recent trend reversal after a three-day fall could be tested in the coming weeks, especially if sector momentum continues to diverge. The Oil sector’s 2.28% gain contrasts with Reliance’s modest 1.26% one-day return, highlighting potential stock-specific challenges or profit-taking pressures.

Comparative Sector and Market Performance

While Reliance Industries is a dominant player in the Oil sector, its relative underperformance compared to the sector’s 2.28% gain and the Sensex’s 0.52% rise suggests selective investor caution. The stock’s liquidity and delivery volume spike indicate that institutional investors may be actively repositioning portfolios, possibly reallocating capital within the sector or across market caps.

Such activity often precedes broader market moves and can provide early signals for traders and portfolio managers seeking to optimise risk-adjusted returns.

Conclusion: Strategic Positioning Amid Mixed Signals

Reliance Industries Ltd’s elevated put option activity at the 1400 strike price ahead of the 24 February expiry highlights a cautious market stance. While the stock has shown signs of short-term recovery, its position below key moving averages and relative underperformance within the Oil sector suggest that investors remain wary of near-term downside risks.

The substantial open interest and turnover in put options indicate active hedging and speculative strategies, reflecting uncertainty about the stock’s trajectory. Market participants should closely monitor price action around the 1400 level and expiry dynamics, as these will likely influence volatility and directional moves.

Given the company’s large-cap status and significant market capitalisation, Reliance remains a critical bellwether for the Oil sector and broader market sentiment. Investors are advised to weigh technical signals alongside fundamental factors and sector trends when considering exposure to this stock.

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