Reliance Industries Sees Heavy Put Option Activity Amid Bearish Sentiment

Put Option Surge Highlights Investor Caution

On 26 February 2026, Reliance Industries emerged as the most active stock in put options trading, with 1,597 contracts exchanged at the ₹1,400 strike price. This activity generated a turnover of ₹2.27 crores (226.774 lakhs) and an open interest of 4,718 contracts, underscoring a pronounced bearish sentiment or strategic hedging by market participants. The underlying stock price hovered just above the strike at ₹1,402.5, indicating that traders are positioning for a potential downside or protecting existing long positions.

The expiry date of 30 March 2026 is notable, as it provides a medium-term horizon for investors to reassess their outlook amid evolving macroeconomic and sector-specific factors. The concentration of put options at this strike price suggests a key psychological and technical level for the stock, with traders anticipating possible declines or volatility in the coming weeks.

Technical Indicators and Market Context

Reliance Industries’ price action today was largely in line with its sector peers, with a marginal day return of 0.16%, slightly outperforming the Oil sector’s -0.04% and closely tracking the Sensex’s 0.24% gain. However, the stock has been trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a persistent downtrend and weakening momentum.

The narrow trading range of ₹9.2 on the day further emphasises subdued volatility, yet the rising delivery volume of 54.93 lakh shares on 25 February, a 52.75% increase over the five-day average, indicates heightened investor participation. This combination of technical weakness and increased trading activity may be driving the surge in put option interest as investors seek downside protection or speculative opportunities.

Market Capitalisation and Quality Assessment

Reliance Industries remains a large-cap heavyweight with a market capitalisation of approximately ₹18.95 lakh crores, reflecting its dominant position in the oil sector. Despite this stature, the company’s Mojo Score has deteriorated to 47.0, earning a Sell grade as of 25 February 2026, down from a previous Hold rating. This downgrade reflects concerns over near-term fundamentals and technical outlook, which may be influencing the increased bearish positioning in options markets.

Implications of Put Option Activity for Investors

The heavy put option volume at the ₹1,400 strike price suggests that investors are either hedging against a potential decline or speculating on downside moves. Given the stock’s current trading below key moving averages and the recent downgrade in Mojo Grade, this bearish positioning aligns with a cautious market outlook.

Open interest of 4,718 contracts at this strike is significant, indicating that these positions are not merely speculative but may represent substantial hedging by institutional investors or traders anticipating volatility. The expiry date in late March provides a timeframe for these positions to play out, with investors likely monitoring upcoming earnings, global oil price trends, and macroeconomic developments closely.

Liquidity and Trading Dynamics

Reliance Industries’ liquidity remains robust, with a five-day average traded value sufficient to support trade sizes of approximately ₹30.74 crores. This liquidity ensures that option traders can enter and exit positions without significant price impact, facilitating the observed surge in put option activity.

Moreover, the rising delivery volume indicates that investors are increasingly committing to their positions, which may translate into more pronounced price movements as expiry approaches. The narrow price range today suggests a consolidation phase, but the technical indicators and options data point towards a potential breakout to the downside.

Sector and Broader Market Comparison

While Reliance Industries is showing signs of technical weakness and bearish sentiment, the broader Oil sector and Sensex have exhibited mixed performance. The sector’s slight decline of 0.04% contrasts with Reliance’s marginal positive return, highlighting the stock’s relative resilience despite negative technical signals.

Investors should weigh these factors carefully, considering both the company’s fundamental strength as a large-cap oil major and the technical signals suggesting caution. The downgrade in Mojo Grade to Sell reinforces the need for prudence, especially for those holding long positions without protective hedges.

Strategic Considerations for Investors

Given the current market signals, investors in Reliance Industries should consider the implications of the heavy put option activity. For long-term holders, the surge in puts may serve as a warning to implement risk management strategies such as protective puts or stop-loss orders. For traders, the concentration of open interest at ₹1,400 strike price offers a clear level to watch for potential price support or breakdown.

Additionally, the expiry timeline of 30 March 2026 provides a window for reassessment based on upcoming quarterly results, oil price fluctuations, and macroeconomic developments impacting the oil sector. Investors should remain vigilant to changes in technical momentum and market sentiment, which could rapidly alter the risk-reward profile of Reliance Industries shares.

Conclusion

Reliance Industries Ltd’s recent surge in put option trading at the ₹1,400 strike price with expiry in late March highlights a growing bearish stance or hedging activity among investors. Despite the stock’s large-cap status and stable underlying value, technical indicators and a recent downgrade to a Sell grade underscore caution. The combination of rising delivery volumes, subdued price movement, and significant open interest in puts suggests that market participants are bracing for potential volatility or downside risk in the near term.

Investors should carefully monitor these developments and consider appropriate risk management measures while evaluating the stock’s prospects relative to sector peers and broader market trends.

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