Options
Put-Call Ratio — Definition & Example
Ratio of put open interest (or volume) to call open interest — a sentiment indicator.
PCR compares put activity to call activity. PCR above 1 suggests bearish sentiment (more puts than calls); below 1 suggests bullish. As a contrarian indicator, extreme PCR readings often mark turning points: very high PCR after a sell-off suggests capitulation; very low PCR after a rally suggests complacency. PCR alone is not a setup but useful as one input.
Formula
PCR = Put OI / Call OI (or Put Volume / Call Volume)Example
NIFTY total put OI = 12,00,000; call OI = 8,00,000. PCR = 12/8 = 1.5. Bearish skew, often interpreted as either confirmation of a downtrend or a contrarian "too many puts, mean reversion likely" signal.
Related
See put-call ratio in your own trades
Upload your tradebook — TradeSaath calculates this automatically.
Try it free →