Rs 1,300 Puts Draw 1,584 Contracts on Reliance Industries Ltd as Stock Trades Below Key Moving Averages

Put Options Event and Cash Market Context

The most active put strikes on Reliance Industries Ltd for the 28 April 2026 expiry are Rs 1,350 and Rs 1,300, with 1,422 and 1,584 contracts traded respectively. The Rs 1,350 puts generated a turnover of ₹2.93 crores and have an open interest of 3,057 contracts, while the Rs 1,300 puts saw ₹1.94 crores in turnover and an open interest of 3,728 contracts. The underlying stock closed at Rs 1,343.50, down 2.17% on the day and trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages.

The stock’s decline contrasts with the Oil Exploration/Refineries sector’s fall of 2.11% and the Sensex’s 1.86% drop, indicating sectoral weakness alongside broader market pressure. Delivery volumes have also contracted sharply, with a 32.66% fall against the 5-day average, signalling reduced investor participation despite the price movement. Is this decline a sign of sustained weakness or a technical correction?

Strike Price Analysis: Moneyness and Distance from Underlying

The Rs 1,300 strike sits approximately 3.1% below the current stock price of Rs 1,343.50, categorising these puts as out-of-the-money (OTM) but close to at-the-money (ATM) territory. The Rs 1,350 strike is slightly in-the-money (ITM) by about 0.4%. The proximity of these strikes to the underlying price is crucial in interpreting the intent behind the put activity.

OTM puts near the money often serve as protective hedges for existing long positions, especially when the stock is in a downtrend but not collapsing. Conversely, ITM puts or ATM puts bought in a falling market can indicate directional bearish bets. The Rs 1,300 puts’ position below the current price but not deeply out-of-the-money suggests a nuanced intent rather than outright bearish speculation. Are these puts signalling a hedge against further downside or a bet on a sharper decline?

Interpreting the Put Activity: Bearish, Hedging, or Put Writing?

Put option activity can be ambiguous. The three primary interpretations for heavy put volume are: directional bearish positioning (put buying), hedging of existing long stock holdings, or put writing (selling puts to collect premium, implying bullish or neutral outlook).

Given the stock’s recent decline and trading below all major moving averages, the put activity could reflect bearish sentiment. However, the strike prices’ proximity to the current price and the sizeable open interest suggest a mix of fresh positioning and adjustments to existing positions. The Rs 1,300 puts’ open interest of 3,728 contracts is substantial but not excessively high relative to traded contracts, indicating ongoing interest rather than purely new bets.

Put writing is less likely here given the turnover and open interest data, which show active buying rather than premium collection. The stock’s downtrend and falling delivery volumes also reduce the likelihood of confident bullish put selling. Instead, the data points towards a combination of protective hedging by longs wary of further declines and some directional bearish bets from traders anticipating continued weakness.

Open Interest and Contracts Analysis

The ratio of contracts traded to open interest provides insight into whether the activity represents fresh positioning or adjustments. For the Rs 1,300 puts, 1,584 contracts traded against an open interest of 3,728, a ratio of approximately 0.42. This suggests a moderate level of fresh activity but also significant existing positions. The Rs 1,350 puts show a similar pattern with 1,422 contracts traded and 3,057 open interest, a ratio of 0.46.

These figures imply that the put activity is not purely speculative but includes position building and rolling over of existing hedges. The open interest levels are sizeable enough to indicate that traders are maintaining downside protection or bearish exposure rather than liquidating positions. How does this balance of fresh and existing positions influence the stock’s near-term outlook?

Cash Market Context: Technical Indicators and Delivery Volumes

Reliance Industries Ltd is trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a sustained downtrend. The stock’s 1-day return of -1.83% slightly outperforms the sector’s -2.20% but aligns with the broader market weakness. The narrowing trading range of Rs 9 suggests consolidation amid selling pressure.

Delivery volumes have declined by 32.66% compared to the 5-day average, indicating reduced conviction among buyers. This thinning participation may be prompting longs to seek downside protection through put options, consistent with the observed OTM put buying. The Rs 1,300 strike roughly corresponds to a technical support zone below the 50-day moving average, reinforcing the hedging interpretation rather than outright bearish speculation.

Conclusion: Protective Hedging with a Bearish Underpinning

The heavy put activity at the Rs 1,300 and Rs 1,350 strikes on Reliance Industries Ltd amid a downtrend and weak delivery volumes suggests a dominant theme of protective hedging by longs wary of further declines. While some directional bearish bets are likely embedded in the activity, the strike prices’ proximity to the current price and the open interest patterns point to a cautious approach rather than outright pessimism.

The stock’s position below all major moving averages and the sector’s weakness provide a technical backdrop that supports this interpretation. Put writing appears less prominent, given the turnover and open interest data. Should investors consider this put activity as a signal to hedge or a warning of deeper weakness ahead?

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