Rs 1,290 Puts — 0.7% Above Current Price — Draw 2,331 Contracts on Reliance Industries Ltd

Put Options Event and Cash Market Context

On 8 July 2026, Reliance Industries Ltd saw notable put option activity concentrated around the Rs 1,290 strike for the 28 July expiry. A total of 2,331 contracts traded at this strike, with a turnover of approximately ₹3.58 crores. This strike is just 0.7% above the current underlying price of Rs 1,281, placing it slightly in-the-money (ITM) for put holders. Other strikes with heavy put activity include Rs 1,260 (2,388 contracts), Rs 1,250 (2,780 contracts), Rs 1,240 (2,848 contracts), and Rs 1,200 (2,633 contracts), showing a broad range of strikes attracting interest.

The stock has been under pressure recently, falling 2.04% on the day and losing 3.14% over the past two sessions. It trades below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a bearish technical backdrop. Delivery volumes have risen 15.1% compared to the five-day average, indicating increased investor participation despite the decline. Is this put activity a reflection of growing downside conviction or a strategic hedge against further weakness?

Strike Price Analysis: Moneyness and Distance from Underlying

The Rs 1,290 strike sits just above the current price, making these puts ITM. The Rs 1,260 and Rs 1,250 strikes are out-of-the-money (OTM) puts, roughly 1.6% and 2.4% below the underlying price respectively. The Rs 1,200 strike is significantly OTM, about 6.4% below the current price. The proximity of the Rs 1,290 strike to the underlying suggests that buyers of these puts are either positioning for a near-term decline or seeking protection against a modest drop.

In contrast, the heavier volumes at the Rs 1,240 and Rs 1,250 strikes, which are OTM, could indicate hedging activity by long holders aiming to protect gains or limit losses if the stock dips further. The Rs 1,200 strike’s sizeable open interest (5,829 contracts) and turnover, despite being further OTM, may also reflect put writing strategies where sellers collect premium betting the stock will not fall that far by expiry.

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

Put option activity is inherently ambiguous. The Rs 1,290 puts being ITM and traded in large volume could signal bearish positioning, anticipating further downside. However, given the stock’s recent decline and technical weakness, these puts might also serve as a protective hedge for existing long positions, especially since the stock is near a 52-week low (just 2.08% above Rs 1,253.2).

The OTM puts at Rs 1,240 and Rs 1,250 with high open interest and turnover suggest a mix of hedging and put writing. Put writing involves selling puts to collect premium, implying a bullish or neutral stance as sellers do not expect the stock to breach those strikes. The Rs 1,200 strike’s large open interest and relatively lower turnover hint at established positions rather than fresh directional bets.

Overall, the data points to a combination of protective hedging and cautious bearish positioning rather than outright bearish conviction. Could this nuanced put activity be signalling a market caught between defensive caution and opportunistic premium collection?

Open Interest and Contracts Analysis

The open interest (OI) at the Rs 1,290 strike stands at 2,471 contracts, slightly above the 2,331 contracts traded on the day, indicating that much of the activity represents fresh positioning rather than merely closing or rolling existing positions. The Rs 1,260 strike shows an OI of 2,784 against 2,388 contracts traded, while Rs 1,200 has a notably higher OI of 5,829 contracts compared to 2,633 traded contracts, suggesting a well-established base of put holders or writers at that level.

The ratio of contracts traded to open interest at the Rs 1,290 strike is close to 1:1, signalling significant new activity. This contrasts with the Rs 1,200 strike where the ratio is less than 0.5, implying less fresh activity and more position maintenance. The OI data supports the interpretation that the Rs 1,290 puts are likely fresh protective or bearish bets, while the deeper OTM strikes reflect a mix of hedging and premium collection strategies.

Cash Market Context: Technicals and Delivery Volumes

Reliance Industries Ltd is trading below all key moving averages, a bearish technical signal that aligns with the put activity at ITM and near-ATM strikes. The stock’s recent two-day decline of over 3% and intraday low of Rs 1,278 reinforce the cautious mood. However, rising delivery volumes of 80.01 lakh shares on 7 July, up 15.1% from the five-day average, indicate that the sell-off is accompanied by genuine investor participation rather than purely speculative moves.

This combination of technical weakness and solid delivery volumes suggests that the put buying is more likely protective hedging by long holders rather than speculative bearish bets. The stock’s proximity to its 52-week low also supports the idea that investors are guarding against further downside rather than aggressively shorting. Is this a sign that the market is bracing for a technical bounce or a deeper correction?

Conclusion: Protective Hedging Dominates Put Activity

The put option activity in Reliance Industries Ltd on 8 July 2026 is best understood as a blend of protective hedging and cautious bearish positioning. The concentration of contracts at the Rs 1,290 strike, just above the current price, combined with the stock’s technical weakness and rising delivery volumes, points to investors seeking downside protection rather than outright bearish bets.

Meanwhile, the significant open interest at lower strikes such as Rs 1,240 and Rs 1,200 suggests put writing and hedging strategies coexist, reflecting a market balancing risk and premium income. The stock’s position below all major moving averages and near its 52-week low adds nuance to the interpretation, indicating that while downside risks are acknowledged, the put activity is not purely speculative bearishness.

With puts active and calls also seeing volume, should investors be hedging their positions in Reliance or is the market signalling a potential stabilisation?

Get 33% Off on our 1 Year Plan - Limited Period Only! Start Today