Rs 1,300 Puts — 6.3 Points Below Current Price — Draw 2,396 Contracts on Reliance Industries Ltd

Put Options Event and Cash Market Context

The 28 July 2026 expiry saw significant put option turnover on Reliance Industries Ltd, with 2,396 contracts traded at the Rs 1,300 strike. The total turnover for these puts was approximately ₹303.33 lakhs, while open interest at this strike stands at 10,381 contracts. The underlying stock closed at Rs 1,308.6, marginally above the put strike, and has gained 0.52% over the past two sessions. This combination of fresh contracts and sizeable open interest points to active repositioning in the options market — but what does this mean for the stock’s near-term outlook?

Strike Price Analysis: Moneyness and Distance

The Rs 1,300 put strike is approximately 0.48% out-of-the-money (OTM) relative to the current price of Rs 1,308.6. This proximity to the underlying price places the strike close to at-the-money (ATM) territory, which is often the focal point for hedging activity or directional bets. The narrow gap suggests that buyers of these puts are either seeking protection against a modest pullback or positioning for a near-term decline. Given the stock’s recent gains and trading just above its 5-day and 20-day moving averages, the strike price aligns with a potential support zone rather than a deep bearish target — is this a hedge or a directional bet?

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

Put option activity can signal multiple strategies. First, the purchase of OTM or near-ATM puts on a rising or stable stock often indicates hedging — investors protecting gains from recent rallies. Second, ATM or in-the-money (ITM) puts bought during a downtrend typically reflect bearish positioning, anticipating further declines. Third, put writing (selling puts) at strikes below the current price can be a bullish strategy, collecting premium with the expectation that the stock will not fall below the strike.

In this case, the Rs 1,300 strike is just below the current price, and the stock has been gaining modestly over two days. The open interest of 10,381 contracts compared to 2,396 traded contracts suggests a mix of fresh buying and existing positions. The stock’s position above short-term moving averages and the strike’s proximity to a potential support zone imply that the put activity is more consistent with protective hedging than outright bearish bets. However, the possibility of put writing cannot be ruled out entirely, given the sizeable open interest and turnover — which strategy dominates the options market for Reliance?

Open Interest and Contracts Analysis

The ratio of contracts traded (2,396) to open interest (10,381) is roughly 0.23, indicating that a significant portion of the activity represents fresh positioning rather than mere rollovers or adjustments. This fresh interest at a strike close to the current price suggests active risk management or directional positioning. The sizeable open interest also points to a well-established level of interest at Rs 1,300, which may act as a psychological or technical support level for the stock. The balance between fresh contracts and existing open interest hints at a mixed strategy, with some participants hedging while others may be writing puts to collect premium.

Cash Market Context: Price Momentum and Moving Averages

Reliance Industries Ltd has gained 0.52% over the last two sessions, trading in a narrow range of Rs 11.6. The stock currently sits above its 5-day and 20-day moving averages but remains below the 50-day, 100-day, and 200-day averages. This positioning suggests short-term strength amid longer-term consolidation. The Rs 1,300 put strike roughly corresponds to a support zone below the 20-day MA but above the 50-day MA, consistent with a technical hedge against a pullback to this support area. Delivery volumes have declined by 31.51% compared to the 5-day average, indicating lower investor participation despite the price gains — does this thinning delivery volume justify the protective put buying?

Delivery Volume and Liquidity Considerations

Delivery volume on 3 July was 56.85 lakh shares, down 31.51% from the 5-day average, signalling reduced conviction behind the recent price rise. The stock remains liquid, with a trade size capacity of approximately ₹34.62 crore based on 2% of the 5-day average traded value. This liquidity supports active options trading and suggests that the put activity is not constrained by market depth. The lower delivery volume amid a modest rally may be prompting investors to hedge their positions with puts, protecting against a potential pullback in the absence of strong delivery-backed momentum.

Conclusion: Protective Hedging Most Likely, But Put Writing Also Possible

The Rs 1,300 put strike’s proximity to the current price of Rs 1,308.6, combined with the stock’s recent modest gains and position above short-term moving averages, suggests that the heavy put activity on Reliance Industries Ltd is primarily protective hedging. Investors appear to be guarding against a mild pullback rather than positioning for a sharp decline. The sizeable open interest and turnover also leave room for put writing strategies, where sellers collect premium expecting the stock to hold above this strike. The thinning delivery volumes amid the rally further support the hedging interpretation, as investors seek insurance in a market lacking strong participation.

With the stock trading in a narrow range and the 28 July expiry approaching, the options market is signalling caution but not outright bearish conviction. Should investors consider hedging their positions or is the rally set to continue?

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