Reliance Industries Sees Surge in Call Option Activity Ahead of Expiry

Robust Call Option Volumes Signal Investor Optimism

Data from the derivatives market reveals that Reliance’s call options have been among the most actively traded contracts today. The strike prices of ₹1,430, ₹1,440, and ₹1,450 have attracted significant volumes, with 6,838, 8,878, and 4,890 contracts traded respectively. The ₹1,430 strike, just below the current underlying price, recorded the highest turnover of ₹244.46 lakhs, underscoring strong interest at this near-the-money level.

Open interest figures further corroborate this bullish positioning. The ₹1,450 strike, slightly out-of-the-money, holds an open interest of 8,244 contracts, the highest among the three strikes, suggesting that traders are betting on a potential price rise beyond this level by expiry. The ₹1,440 and ₹1,430 strikes also maintain substantial open interest of 6,728 and 6,021 contracts respectively, indicating sustained investor engagement across this price band.

Expiry Patterns and Market Context

The expiry date of 24 February 2026 is just around the corner, intensifying activity in these call options. Such concentration of open interest near the current stock price often points to a pivotal moment where market participants anticipate a breakout or a significant directional move. Given Reliance’s recent performance, this heightened activity is consistent with a cautiously optimistic outlook.

Reliance Industries has outperformed its sector by 0.56% today, with a 0.89% gain compared to the Oil sector’s 0.35% and the broader Sensex’s 0.64%. The stock has been on a two-day winning streak, delivering a cumulative return of 1.67%, albeit within a narrow trading range of ₹11.9. This consolidation phase, coupled with rising call option interest, suggests investors are positioning for a potential breakout.

Technical Indicators and Investor Participation

From a technical standpoint, Reliance’s share price 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 picture indicates short-term strength amid longer-term resistance levels. Meanwhile, delivery volumes have declined by 5.35% against the five-day average, signalling a slight dip in investor participation despite the price gains.

Liquidity remains robust, with the stock’s traded value supporting sizeable trade sizes up to ₹25.45 crores, ensuring that option market activity is backed by sufficient underlying liquidity. This is crucial for the smooth execution of large option trades and reflects the stock’s stature as a large-cap heavyweight with a market capitalisation of ₹19,37,849.55 crores.

Mojo Score Downgrade Reflects Cautious Outlook

Despite the bullish option activity, MarketsMOJO’s latest assessment downgraded Reliance Industries from a Buy to a Hold rating on 6 January 2026, assigning a Mojo Score of 62.0. This reflects a tempered view on the stock’s near-term prospects, possibly due to valuation concerns or sector headwinds. The market cap grade remains at 1, indicating Reliance’s dominant position within the Oil sector and large-cap universe.

Investors should weigh this cautious fundamental outlook against the evident bullish sentiment in the options market. The divergence between derivatives positioning and fundamental ratings often signals a market in flux, where short-term traders anticipate gains while longer-term investors remain guarded.

Strike Price Concentration and Potential Price Targets

The clustering of call option interest around ₹1,430 to ₹1,450 suggests that traders are eyeing a breakout above these levels. Should Reliance breach ₹1,450 by expiry, option holders at this strike stand to benefit significantly, potentially driving further buying interest in the underlying stock. Conversely, failure to surpass these strikes could lead to profit-taking and a reversion to the mean.

Given the current underlying price of ₹1,432, the ₹1,440 strike represents a critical resistance zone. The high turnover of ₹167.79 lakhs at this strike indicates active repositioning by market participants, possibly adjusting their exposure as expiry approaches.

Implications for Investors and Traders

For investors, the current scenario presents a nuanced picture. The strong call option activity signals optimism for a near-term rally, but the Hold rating and mixed technical indicators counsel prudence. Traders with a bullish bias may consider leveraging call options at the ₹1,440 and ₹1,450 strikes to capitalise on potential upside, while risk-averse investors might await clearer confirmation of trend direction.

Moreover, the narrowing trading range and declining delivery volumes suggest that the market is in a consolidation phase, often a precursor to a decisive move. Monitoring open interest changes and volume spikes in the coming sessions will be critical to gauge the sustainability of the current momentum.

Sector and Market Comparison

Reliance’s outperformance relative to the Oil sector and Sensex today highlights its resilience amid broader market dynamics. The Oil sector’s modest 0.35% gain contrasts with Reliance’s 0.89% rise, underscoring the company’s leadership within the industry. This relative strength may attract further investor interest, especially if global oil prices remain stable or improve.

However, investors should remain mindful of macroeconomic factors such as crude price volatility, regulatory developments, and geopolitical risks that could impact the sector’s trajectory and, by extension, Reliance’s stock performance.

Conclusion

Reliance Industries Ltd’s surge in call option activity ahead of the 24 February expiry reflects a bullish tilt among market participants, with significant interest clustered around strike prices near the current market level. While the underlying stock has shown resilience and outperformance, the recent downgrade to a Hold rating and mixed technical signals advise caution.

Investors and traders should closely monitor price action around the ₹1,440 to ₹1,450 levels, as a breakout could trigger further gains. Conversely, failure to breach these strikes may lead to consolidation or correction. Balancing derivatives market insights with fundamental analysis will be key to making informed decisions in the coming weeks.

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