Surge in Put Option Volumes Highlights Bearish Sentiment
Data from the derivatives market reveals that Reliance Industries Ltd (NSE: RELIANCE) recorded the highest put option volumes for expiry on 25 August 2026. The 1300 strike price put options saw 6,809 contracts traded, generating a turnover of ₹941.68 lakhs, while the 1280 strike price put options witnessed even higher activity with 7,180 contracts traded and turnover of ₹686.41 lakhs. Open interest at these strikes remains elevated at 11,516 and 6,757 contracts respectively, underscoring sustained bearish bets or protective hedging strategies.
The underlying stock closed at ₹1,275 on 4 August 2026, hovering just 1.96% above its 52-week low of ₹1,249.8. This proximity to a yearly trough, combined with the heavy put option interest, suggests that market participants are bracing for further downside or seeking downside protection amid ongoing volatility.
Technical Weakness and Sector Underperformance
Reliance Industries has underperformed its oil sector peers and the broader market in recent sessions. The stock declined by 1.57% on the day, lagging the sector’s 0.94% fall and the Sensex’s modest 0.43% drop. Over the past two trading days, Reliance has lost 3.35% cumulatively, reflecting a clear downtrend. Notably, the share price is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling sustained technical weakness.
Investor participation has also waned, with delivery volumes falling by 11.19% to 56.26 lakh shares on 4 August compared to the five-day average. This decline in delivery volume amid price weakness often indicates reduced conviction among buyers, potentially amplifying bearish momentum.
Expiry Dynamics and Strike Price Concentration
The expiry date of 25 August 2026 is critical as it approaches within three weeks. The concentration of put option activity at strikes 1280 and 1300, both close to the current market price, suggests that traders are positioning for a possible breakdown below these levels. The open interest figures imply that a significant number of contracts remain outstanding, which could lead to increased volatility as expiry nears and traders adjust or unwind positions.
Such strike price clustering near the money often reflects a market consensus that downside risks are elevated. It also points to the use of puts as a hedging tool by institutional investors or as speculative bets by traders anticipating further declines.
Mojo Score and Analyst Ratings Reflect Caution
Reliance Industries currently holds a Mojo Score of 41.0, categorised as a Sell rating. This represents a downgrade from a previous Hold rating on 11 May 2026, signalling a deterioration in the company’s fundamental and technical outlook. The large-cap oil sector stock’s downgrade aligns with the observed bearish positioning in the options market and the recent price underperformance.
Market participants should note that the downgrade and bearish technical signals come amid a challenging macroeconomic environment for the oil sector, including fluctuating crude prices and regulatory uncertainties. These factors may continue to weigh on Reliance’s near-term performance.
Implications for Investors and Traders
For investors, the heavy put option activity and technical weakness suggest caution. Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate downside risk. Conversely, traders with a bearish outlook might view the current environment as an opportunity to capitalise on expected declines, especially given the liquidity and turnover in put options at key strikes.
It is also important to monitor open interest changes and price action as expiry approaches, as these can provide clues about potential price support or breakdown levels. A sustained breach below the 1280–1300 range could trigger further selling pressure, while a rebound above key moving averages might alleviate some bearish sentiment.
Context Within the Oil Sector
Reliance Industries’ underperformance relative to the oil sector and the broader market highlights sector-specific headwinds. While the oil industry has seen bouts of volatility due to geopolitical tensions and supply-demand imbalances, Reliance’s stock appears particularly vulnerable given its current technical setup and investor sentiment.
Investors should weigh these factors alongside company-specific fundamentals and broader market trends before making allocation decisions. The large market capitalisation of ₹17,50,569 crores underscores Reliance’s significance in the index, meaning its price movements can have notable impact on sectoral and benchmark indices.
Conclusion: Bearish Positioning Dominates Ahead of Expiry
In summary, Reliance Industries Ltd is at the centre of heightened bearish activity in the options market, with put options at strikes 1280 and 1300 dominating volumes and open interest ahead of the 25 August 2026 expiry. The stock’s proximity to its 52-week low, combined with technical weakness and a recent downgrade to a Sell rating, reinforces the cautious outlook.
Market participants should closely monitor price action and options market dynamics in the coming weeks, as these will provide critical signals on whether the current bearish momentum will persist or if a reversal is on the horizon. For now, the data points to a market bracing for further downside or at least significant volatility in Reliance Industries’ shares.
