Reliance Industries Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On 20 February 2026, Reliance Industries witnessed a remarkable surge in put option contracts, with 4,884 contracts traded at the 1,400 strike price for the expiry on 24 February 2026. This volume translated into a turnover of ₹13.63 crores, reflecting significant investor interest in downside protection or speculative bearish bets. The open interest at this strike stands at 8,233 contracts, underscoring sustained demand for puts at this level.

The underlying stock price at the time was ₹1,417.30, placing the 1,400 strike put slightly out-of-the-money but close enough to be relevant for hedging strategies. This concentration of activity at the 1,400 strike suggests market participants are bracing for potential downside or volatility in the immediate expiry cycle.

Technical and Market Context

Reliance Industries’ price action on 20 February was characterised by a narrow trading range of ₹10.40, indicating subdued volatility despite the heightened options activity. The stock closed with a 0.52% gain, marginally outperforming the oil sector’s 0.32% rise and the broader Sensex’s 0.07% increase. However, technical indicators paint a more cautious picture: the stock is trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a persistent downtrend across multiple timeframes.

Investor participation appears to be waning, with delivery volumes on 19 February falling by 23.87% compared to the five-day average, suggesting reduced conviction in the current price levels. Despite this, liquidity remains robust, with the stock’s average traded value supporting trade sizes up to ₹27.18 crores comfortably, ensuring that option and stock trades can be executed without significant market impact.

Investor Sentiment and Strategic Implications

The elevated put option volumes at the 1,400 strike price reflect a growing bearish sentiment or a strategic hedging posture among institutional and retail investors alike. Given Reliance Industries’ large-cap status with a market capitalisation of ₹19,17,280.19 crores, such option activity is often interpreted as a barometer of broader market expectations for the oil sector and the company’s near-term performance.

Notably, the company’s Mojo Score has recently been downgraded from a Buy to a Hold rating as of 6 January 2026, with a current score of 62.0. This downgrade aligns with the technical weakness and the cautious stance observed in the options market. The Market Cap Grade remains at 1, indicating the stock’s significant weight and influence within the sector and indices.

Investors should consider the implications of this put-heavy positioning carefully. While it may signal expectations of price corrections or increased volatility, it could also represent prudent risk management amid uncertain macroeconomic or sector-specific developments, such as fluctuating crude oil prices or regulatory changes impacting the energy industry.

Expiry Patterns and Market Dynamics

The 24 February 2026 expiry is attracting concentrated put option interest, which often precedes heightened price movements or volatility around expiry dates. Traders frequently use put options to hedge long stock positions or to speculate on downside moves, especially when technical indicators suggest weakening momentum.

Reliance’s current trading below all major moving averages adds to the likelihood of near-term price pressure, which may prompt further put buying or protective strategies. The open interest build-up at the 1,400 strike is a key metric to watch, as any unwinding or roll-over of these positions in subsequent expiry cycles could influence price dynamics.

Broader Sector and Market Considerations

Reliance Industries operates within the oil sector, which has experienced mixed performance amid global energy market fluctuations and geopolitical tensions. The stock’s performance today, slightly ahead of the sector’s 0.32% gain, indicates relative resilience, yet the technical and options data suggest investors are preparing for potential headwinds.

Given the company’s pivotal role in India’s energy landscape and its diversified business model, the current put option activity may also reflect hedging against sector-specific risks or broader market corrections. Investors should monitor upcoming earnings announcements, crude oil price trends, and policy developments that could impact Reliance’s fundamentals and market sentiment.

Conclusion: Navigating the Near-Term Outlook

Reliance Industries’ surge in put option trading ahead of the 24 February expiry highlights a cautious or bearish tilt among market participants. The concentration of activity at the 1,400 strike price, combined with the stock’s technical weakness and recent rating downgrade, suggests investors are positioning for potential downside or volatility in the short term.

While the stock remains a heavyweight in the oil sector with strong liquidity and market presence, the current environment calls for careful risk management and close monitoring of price action and option market developments. Investors may consider balancing exposure with protective strategies or exploring alternative opportunities within and beyond the oil sector.

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