India Reliance Call Options Surge to 11-Week High Before Results

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Bullish equity options in Reliance Industries Ltd. jumped to a 11-week high amid optimism India’s second-most valuable company will report record earnings on Friday.

Call options climbed to 25,246 contracts as of data available at 3:42 p.m. in Mumbai, the most since April 30, data compiled by Bloomberg show. Calls with a strike price of 1,040 rupees had the most number of outstanding contracts. Open interest in puts climbed to 18,132, the most since June 25.

“Traders are buying 1,040-rupee and 1,020-rupee calls, pulling the put-call ratio lower in anticipation of positive results,” Bhavin Desai, a Mumbai-based derivatives analyst at Motilal Oswal Financial Services Ltd., said by phone.

Reliance’s shares were the best performer on the S&P BSE Sensex index. They climbed 4.2 percent to a one-year high of 1,050.40 rupees at Wednesday’s close. The stock has gained 5 percent this month, adding to a 21 percent surge in the quarter to June 30. The company will post record quarterly earnings on a standalone basis amid lower crude costs and higher product prices, according to estimates compiled by Bloomberg.

Shares of Reliance, owner of the world’s largest crude oil refining complex, are valued at 12.2 times their projected 12-month earnings.

“Refining margins and petrochemical cracks remain robust above the three-year average,” Rohit Ahuja, an analyst at ICICI Securities Ltd., wrote in a July 12 report. “Reliance Industries is expected to be the key gainer from this trend.”

The India VIX Index, a benchmark measure of option costs, rose 0.2 percent to 15.1. The 50-stock CNX Nifty index gained 1.2 percent to 8,633.50.

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