Rs 1,300 Puts — 1.4% Below Current Price — Draw 3,364 Contracts on Reliance Industries Ltd

Put Options Event and Cash Market Context

On 21 Jul 2026, the Rs 1,300 put strike for expiry on 28 Jul 2026 saw 3,364 contracts traded, generating a turnover of approximately ₹141.12 lakhs. The open interest at this strike stands at 8,127 contracts, indicating a substantial build-up of positions. A nearby strike, Rs 1,320, also attracted significant put activity with 3,460 contracts traded and an open interest of 5,885 contracts, with turnover nearly double at ₹288.91 lakhs. The underlying stock closed at Rs 1,318.40, marginally below the Rs 1,320 strike but above Rs 1,300, suggesting the Rs 1,300 puts are slightly in-the-money (ITM) while the Rs 1,320 puts are at-the-money (ATM).

The stock has underperformed its sector marginally today, falling 0.40%, and has declined 0.84% over the past two sessions. Despite this, it remains 4.78% above its 52-week low of Rs 1,253.20. The price currently sits above the 5-day and 20-day moving averages but below the 50-day, 100-day, and 200-day averages, indicating mixed technical signals. Delivery volumes have declined by 4.85% against the 5-day average, suggesting reduced investor participation in the recent price moves — does this thinning delivery volume explain the surge in put activity?

Strike Price Analysis: Moneyness and Distance from Underlying

The Rs 1,300 strike sits approximately 1.4% below the current market price, placing it just ITM. The Rs 1,320 strike is effectively ATM, only 0.1% above the underlying price. This proximity to the current price is critical in interpreting the put activity. ITM and ATM puts tend to be more expensive and are often used either for directional bearish bets or as protective hedges for existing long positions. The relatively close strike distance suggests that the put buyers are not speculating on a sharp decline but rather positioning for a moderate downside or protection against short-term volatility.

Given the expiry is just a week away, the time value of these options is limited, which typically increases the premium sensitivity to price movements. The Rs 1,300 strike’s high open interest and turnover imply that traders are actively positioning around this level, possibly anticipating a support zone or using it as a hedge against recent gains — is this activity more about protection than bearish conviction?

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

Put option activity can be ambiguous. The three main interpretations for heavy put volume are directional bearish bets, hedging of existing long positions, or put writing (selling puts) as a bullish strategy. For Reliance Industries Ltd, the data suggests a nuanced picture.

Directional bearish positioning would imply that traders expect the stock to fall below Rs 1,300 by expiry. However, the stock’s recent price action — a modest decline but still above short-term moving averages — does not strongly support a sharp near-term drop. The Rs 1,300 strike being ITM could indicate some bearish bets, but the limited price fall and proximity to support levels suggest caution in this interpretation.

Hedging is a plausible explanation. The stock’s position above the 5-day and 20-day moving averages, combined with a recent rally from the 52-week low, means investors may be protecting gains with puts just below the current price. The put activity at Rs 1,300 and Rs 1,320 strikes aligns with typical protective hedging, where investors buy puts slightly below or at the money to limit downside risk without exiting their long positions.

Put writing, or selling puts, is less evident here given the high turnover and open interest on the buy side. However, the presence of significant open interest at these strikes could also reflect put sellers confident that the stock will not breach these levels, effectively collecting premium as a bullish bet. The mixed price action and technicals support a scenario where some market participants are writing puts while others hedge or take bearish positions.

Open Interest and Contracts Analysis

The ratio of contracts traded to open interest at the Rs 1,300 strike is roughly 0.41 (3,364 contracts traded vs 8,127 OI), indicating that a significant portion of the activity represents fresh positioning rather than just rollovers or adjustments. Similarly, the Rs 1,320 strike shows a ratio of 0.59 (3,460 contracts traded vs 5,885 OI), also suggesting active new interest.

These figures imply that traders are actively establishing or increasing positions at these strikes ahead of the 28 Jul expiry. The fresh positioning at strikes close to the current price supports the view that the put activity is not merely speculative but tied to near-term risk management or directional views. The relatively balanced open interest between the two strikes also points to a layered approach, with some participants hedging at Rs 1,320 and others possibly betting or hedging at Rs 1,300.

Cash Market Context: Technicals and Delivery Volumes

Reliance Industries Ltd currently trades above its 5-day and 20-day moving averages but remains below the 50-day, 100-day, and 200-day averages. This mixed technical setup suggests short-term strength amid longer-term resistance. The Rs 1,300 put strike roughly corresponds to a support zone below the 50-day moving average, which may be why put buyers are active here — they could be protecting against a pullback to this technical level.

Delivery volumes have declined by 4.85% compared to the 5-day average, signalling reduced conviction in the recent price moves. This thinning participation may be prompting investors to hedge their positions with puts, as the rally lacks strong delivery-backed support — should investors consider similar protective strategies?

Conclusion: Protective Hedging Most Likely, But Bearish Bets Present

The heavy put activity at strikes just below and at the current price level on Reliance Industries Ltd reflects a complex interplay of hedging and directional positioning. The stock’s recent modest decline, proximity to key moving averages, and reduced delivery volumes suggest that much of the put buying is likely protective, aimed at limiting downside risk rather than signalling outright bearish conviction.

However, the presence of ITM puts and significant open interest also indicates that some traders are positioning for a potential near-term correction. Put writing activity, while less obvious, may be present as well, reflecting confidence that the stock will hold above these strikes.

Overall, the options data combined with the cash market context points to a cautious market stance, where protection is the dominant theme but not without some bearish undertones — is this the right moment to hedge or adjust exposure in Reliance Industries Ltd?

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