Put-Call Ratio

Put-Call Ratio

Option traders use the Put-Call Ratio – open interest on or trading volumes of put options relative to open interest on or trading volume of call options – to gauge market sentiment. If there is more open interest on calls (meaning traders expect underlyings to rise in price) than on puts (meaning traders expect the underlyings to fall), it can be inferred that the market has a positive orientation around that underlying. A Put-Call Ratio higher than 1 suggests the opposite.

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