Reliance Industries Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On the expiry date of 24 February 2026, Reliance Industries recorded the most active put options at strike prices ₹1,410 and ₹1,400. The ₹1,400 strike saw the highest number of contracts traded at 4,291, with an open interest of 7,703 contracts, indicating substantial investor interest in downside protection or speculative bearish bets. The turnover for this strike was ₹3.86 lakhs. Meanwhile, the ₹1,410 strike price put options traded 2,802 contracts with an open interest of 2,125 and a turnover of ₹26.48 lakhs.

The underlying stock price stood at ₹1,418.7, placing these strike prices just below or near the current market level. This concentration of put activity close to the spot price suggests that traders are positioning for a potential decline or increased volatility in the near term.

Stock Performance and Technical Indicators

Reliance Industries underperformed its oil sector peers by 0.27% on the day, with a 1-day return of -0.65% compared to the sector’s -0.15% and the broader Sensex’s -0.89%. The stock has reversed after two consecutive days of gains, trading within a narrow range of ₹7. Notably, RIL is currently trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a bearish technical setup.

Investor participation has risen, with delivery volumes reaching 37.14 lakh shares on 23 February, a 22.69% increase over the five-day average. This heightened activity, combined with the put option surge, points to growing caution among market participants.

Market Capitalisation and Mojo Ratings

Reliance Industries remains a large-cap heavyweight with a market capitalisation of ₹19,32,301 crore. However, its Mojo Score has declined to 62.0, resulting in a downgrade from a Buy to a Hold rating as of 6 January 2026. The Market Cap Grade stands at 1, reflecting its dominant position but tempered by recent performance and outlook.

Investor Sentiment and Hedging Strategies

The pronounced put option activity near the ₹1,400 strike price suggests that investors are either hedging existing long positions or speculating on a downside move. Put options serve as insurance against falling prices, and the elevated open interest at these strikes indicates a sizeable contingent preparing for potential weakness.

Given the stock’s current technical weakness and the recent downgrade in Mojo Grade, market participants appear to be adopting a cautious stance. The narrow trading range and increased delivery volumes further reinforce the view that investors are positioning carefully ahead of possible volatility.

Expiry Patterns and Market Implications

The expiry on 24 February 2026 has attracted significant options activity, with put contracts dominating the most active trades. This pattern often precedes heightened price movements as traders adjust their positions before expiry. The concentration of open interest at strike prices just below the current market level could act as a support zone, but if breached, may accelerate selling pressure.

Reliance’s underperformance relative to its sector and the broader market adds to the bearish undertone. While the stock remains a large-cap leader in the oil industry, the current technical and options data suggest investors are bracing for near-term challenges.

Outlook and Investor Considerations

For investors, the current scenario calls for prudence. The downgrade to a Hold rating and the technical weakness suggest that Reliance Industries may face headwinds in the short term. The heavy put option activity near ₹1,400 strike prices indicates that downside risk is being actively managed or anticipated.

Long-term investors should monitor whether the stock can reclaim key moving averages and stabilise above the ₹1,420-₹1,430 range to regain bullish momentum. Meanwhile, traders and hedgers may continue to use put options as a risk management tool amid ongoing market uncertainties.

Comparative Sector Performance

While Reliance has underperformed the oil sector by 0.27% on the day, the broader sector remains relatively resilient. This divergence highlights company-specific factors influencing investor sentiment. The stock’s liquidity remains robust, with a trade size capacity of approximately ₹26.52 crore based on 2% of the five-day average traded value, ensuring ease of entry and exit for active traders.

Conclusion

Reliance Industries Ltd’s recent surge in put option activity, combined with technical weakness and a Mojo rating downgrade, signals a cautious market outlook. Investors are evidently hedging against potential downside risks as the stock trades below multiple moving averages and underperforms its sector. While the company’s large-cap stature and market dominance remain intact, near-term volatility and bearish positioning warrant close attention from market participants.

Monitoring open interest trends and expiry dynamics in the coming sessions will be crucial to gauge whether this bearish sentiment persists or if a reversal is on the horizon.

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