Reliance Industries Sees Surge in Put Option Activity Amid Bearish Sentiment

Put Option Activity Highlights

On 25 February 2026, Reliance Industries Ltd (stock code 605152) recorded the most active put options on the National Stock Exchange, with 6,995 contracts traded at the 1,400 strike price expiring on 30 March 2026. The turnover for these contracts reached ₹696.35 lakhs, reflecting significant investor interest in downside protection or speculative bearish bets. Open interest stood at 3,997 contracts, indicating sustained positioning rather than a one-off spike.

The underlying stock price was ₹1,413.40 at the time, just above the strike price, suggesting that traders are positioning for a potential decline below this level within the next month. This activity is particularly noteworthy given Reliance’s status as a large-cap oil sector leader with a market capitalisation of ₹19,36,902 crores.

Market Performance and Technical Indicators

Reliance Industries underperformed its sector by 0.53% on the day, with a 1-day return of -1.52% compared to the oil sector’s -1.30%. The broader Sensex, in contrast, posted a modest gain of 0.22%, underscoring sector-specific pressures. The stock has reversed its recent three-day rally, falling below key moving averages including the 5-day, 20-day, 50-day, 100-day, and 200-day marks. This technical weakness aligns with the increased put option interest, signalling a shift in investor sentiment.

Investor participation has also risen sharply, with delivery volumes on 24 February reaching 51.1 lakh shares, a 60.09% increase over the five-day average. This heightened liquidity supports the active options market and suggests that traders are actively adjusting their positions amid evolving market conditions.

Mojo Score and Analyst Ratings

Reliance Industries currently holds a Mojo Score of 62.0, categorised as a 'Hold' grade, a downgrade from its previous 'Buy' rating on 6 January 2026. This adjustment reflects a more cautious stance by analysts amid recent price weakness and sector headwinds. The company’s market cap grade remains at 1, indicating its large-cap status and liquidity profile.

Despite the downgrade, Reliance’s fundamentals remain robust, supported by its diversified oil business and strategic investments. However, the technical deterioration and increased put option activity suggest that investors are hedging against near-term volatility or potential downside risks.

Expiry Patterns and Strike Price Concentration

The concentration of put option contracts at the 1,400 strike price for the 30 March 2026 expiry is significant. This strike is close to the current market price, making it a critical level for traders to watch. The open interest of nearly 4,000 contracts at this strike indicates a sizeable pool of investors expecting or protecting against a decline below this threshold within the next five weeks.

Such positioning often serves dual purposes: hedging existing long stock holdings against downside risk and speculating on a price correction. The expiry date also coincides with the end of the financial year quarter, a period typically associated with portfolio rebalancing and increased volatility.

Sector and Broader Market Context

The oil sector has faced mixed pressures recently, including fluctuating crude prices and regulatory uncertainties. Reliance’s underperformance relative to its sector peers and the broader market reflects these challenges. The stock’s liquidity, with a trade size capacity of ₹27.58 crores based on 2% of the five-day average traded value, ensures that these option market moves are backed by substantial underlying stock activity.

Investors should note that while the put option surge signals caution, it does not necessarily imply an imminent sharp decline. Instead, it highlights a market environment where downside protection is in demand amid uncertain macroeconomic and sector-specific factors.

Investor Implications and Outlook

For investors, the heightened put option activity in Reliance Industries signals a need for vigilance. The stock’s technical weakness and bearish options positioning suggest that downside risks are being priced in, at least in the short term. Those holding long positions may consider protective strategies such as buying puts or tightening stop-loss levels.

Conversely, contrarian investors might view the current put activity as an opportunity to assess entry points, especially if the stock stabilises above key support levels. The company’s strong fundamentals and dominant market position in the oil sector provide a solid backdrop for medium to long-term investment.

Monitoring the evolution of open interest and strike price concentrations in the coming weeks will be crucial to gauge whether bearish sentiment intensifies or dissipates. Additionally, macroeconomic developments and crude oil price movements will remain key drivers of Reliance’s stock trajectory.

Conclusion

Reliance Industries Ltd’s recent surge in put option trading at the 1,400 strike price for the 30 March expiry reflects growing investor caution amid technical weakness and sector headwinds. While the company retains a strong fundamental profile, the market is signalling increased hedging and bearish positioning. Investors should carefully analyse these signals alongside broader market trends to make informed decisions in the weeks ahead.

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