Reliance Industries Sees Heavy Put Option Activity Amid Mixed Market Signals

Put Option Activity Highlights

On 5 January 2026, Reliance Industries Ltd (NSE: RELIANCE) recorded significant put option trading volumes, with three strike prices dominating the activity for the expiry dated 27 January 2026. The 1600 strike price saw the highest number of contracts traded at 5,182, generating a turnover of ₹536.86 lakhs and an open interest of 3,372 contracts. Close behind, the 1560 strike price had 2,430 contracts traded with a turnover of ₹101.21 lakhs and open interest of 2,838. The 1580 strike price also attracted substantial interest, with 2,230 contracts traded, turnover of ₹149.30 lakhs, and open interest standing at 3,004 contracts.

The underlying stock price at the time was ₹1,597.80, placing the 1600 and 1580 strike puts slightly out-of-the-money and the 1560 strike puts further out-of-the-money. This concentration of put option activity near and just below the current market price indicates a cautious stance among traders, possibly reflecting hedging against a potential downside or outright bearish bets.

Stock Performance and Market Context

Reliance Industries has been on a steady upward trajectory, hitting a new 52-week high of ₹1,611.80 on the day of reporting. The stock has gained 3.86% over the past four consecutive trading sessions, outperforming the oil sector’s 0.08% gain and the broader Sensex, which declined by 0.15% on the same day. The stock trades comfortably above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a strong technical uptrend.

Investor participation has also risen markedly, with delivery volumes reaching 51.81 lakh shares on 2 January 2026, a 71.22% increase compared to the five-day average. Liquidity remains robust, supporting trade sizes up to ₹22.31 crore based on 2% of the five-day average traded value. The company’s market capitalisation stands at a commanding ₹21,62,082.56 crore, categorising it as a large-cap stock with a strong presence in the oil sector.

Mojo Score and Analyst Ratings

MarketsMOJO assigns Reliance Industries a Mojo Score of 70.0, reflecting a positive outlook with a Buy grade. This is an upgrade from the previous Hold rating, which was revised on 3 November 2025. The market cap grade is rated 1, indicating the stock’s large-cap status and relative stability. The upgrade suggests improved fundamentals and technicals, although the heavy put option activity points to some investor caution or hedging strategies in place.

Interpreting the Put Option Surge

The surge in put option volumes and open interest at strike prices close to the current market price is often interpreted as a sign of increased hedging or bearish sentiment. Traders may be buying puts to protect long positions in Reliance Industries amid concerns over near-term volatility or sector-specific risks such as fluctuating crude oil prices, regulatory changes, or global economic uncertainties.

Alternatively, the activity could reflect speculative bearish bets anticipating a price correction after the recent rally. The 1600 strike price, being just above the current market price, is particularly notable for its high turnover and open interest, suggesting that many investors are positioning for a potential pullback or are seeking downside protection.

Expiry Patterns and Market Implications

With the expiry date set for 27 January 2026, the coming weeks will be critical in determining whether these put options will be exercised or expire worthless. The clustering of open interest near the 1560 to 1600 strike range indicates a key support zone that market participants are watching closely. Should Reliance Industries maintain its upward momentum and stay above these levels, the puts may lose value, benefiting option sellers. Conversely, a decline below these strikes could trigger significant option exercises, potentially amplifying downward pressure on the stock.

Sector and Peer Comparison

Within the oil sector, Reliance Industries remains a bellwether stock, and its option market activity often reflects broader sector sentiment. The oil sector has experienced mixed performance recently, with global crude prices fluctuating amid geopolitical tensions and demand concerns. Reliance’s ability to outperform the sector and the Sensex in recent sessions underscores its resilience, yet the put option activity suggests that investors remain vigilant about potential headwinds.

Investor Takeaways and Outlook

For investors, the current scenario presents a nuanced picture. Reliance Industries’ strong technicals and recent upgrades support a positive medium-term outlook. However, the heavy put option activity signals that market participants are hedging against potential near-term volatility or downside risks. This duality suggests that while the stock remains a core holding for many, prudent investors should monitor option market trends and sector developments closely.

Given the stock’s liquidity and large-cap status, it remains an attractive candidate for both long-term investors and traders seeking to capitalise on volatility through options strategies. The upcoming expiry on 27 January 2026 will be a key event to watch, as it may provide clearer signals on market sentiment and price direction.

Conclusion

Reliance Industries Ltd continues to command significant attention in the options market, with put options at strike prices near the current market level seeing unprecedented volumes and open interest. This activity reflects a blend of hedging and bearish positioning amid a backdrop of strong stock performance and sector uncertainties. Investors should weigh these factors carefully, balancing the company’s robust fundamentals and recent upgrades against the caution implied by option market dynamics.

As the expiry date approaches, monitoring changes in open interest and price action will be crucial for making informed investment decisions in this oil sector giant.

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