What is Put/Call Ratio?
Put/call ratio divides put volume or OI by call volume or OI. Extreme readings are used as contrarian or fear/greed context.
Formula
Put-Call Ratio = Total Put Volume / Total Call Volume
Indian market context (NSE)
Reference levels: Nifty 50 at 24,300, Reliance Industries at ₹1,300, Bank Nifty futures at 55,000 (lot size 30). Examples below show how Put/Call Ratio shows up on Indian index, equity, and futures books — update to live quotes in your journal.
Nifty 50 perspective
Nifty at 24,300: weekly/monthly option chains centre on round strikes (24,000 / 24,500). Put-Call Ratio on ATM Nifty options shifts quickly into expiry — India VIX and event risk (RBI, budget) reprice premiums independent of spot.
Reliance Industries perspective
Reliance at ₹1,300: stock options are American-style on NSE with liquidity concentrated near ATM strikes. Put-Call Ratio behaviour on ₹1,300 handle differs from index options — watch assignment on short ITM legs before expiry.
Bank Nifty futures perspective
Bank Nifty futures at 55,000: hedging with options or trading put-call ratio on Bank Nifty weekly contracts — theta and gamma rise sharply into Thursday expiry; futures leg has no time decay but carries overnight gap risk.
How to validate
- Minimum sample: 30 closed trades on one strategy tag before trusting Put/Call Ratio.
- Check for one outlier week inflating Put/Call Ratio — export largest winners and losers.
- Recompute Put/Call Ratio after including brokerage, STT, and slippage on F&O tags.
- Compare Put/Call Ratio on the same date range as profit factor and max drawdown.
How to track in TradeLyser
- Open Strategy Board or analytics → filter by strategy tag and review period.
- Locate the widget or column reporting Put/Call Ratio (or export trades to compute manually).
- Store snapshot values in weekly review: Put/Call Ratio, profit factor, drawdown, trade count.
- If Put/Call Ratio is custom, add a spreadsheet column fed from TradeLyser CSV export.
Best practices
- Publish Put/Call Ratio per strategy, not only at account level.
- Use the same calculation window (weekly vs monthly) year-round.
- Pair Put/Call Ratio with sample size in every review slide or note.
- Reconcile Put/Call Ratio with broker statements before tax filing.
Common pitfalls
- Changing rules after fewer than 20 trades because Put/Call Ratio moved slightly.
- Mixing intraday and positional tags when computing Put/Call Ratio.
- Ignoring costs so Put/Call Ratio looks better than banked P&L.
- Letting one outlier trade dominate the Put/Call Ratio reading.
How to use this in TradeLyser
Log PCR value and source at session open when it affects bias. Filter analytics by PCR bucket.
Related terms
FII (Foreign Institutional Investor) and DII (Domestic Institutional Investor) flow data summarise net buying or selling by registered institutions in Indian cash equities. Provisional daily figures are widely tracked as macro context for Nifty direction, sector rotation, and risk appetite.
Implied volatility backs out expected future volatility from current option premiums using pricing models. It can diverge sharply from recent realised volatility.
Open interest is the number of active derivative contracts not yet closed. Rising OI with rising price often suggests new long initiation; interpretations vary by context.
Open interest (OI) change is the day-over-day or session change in outstanding F&O contracts. Rising OI with price up often suggests new long buildup; rising OI with price down suggests new short buildup — interpretation depends on contract series and expiry proximity.
Options flow refers to aggregated unusual activity — large blocks, sweeps, or OI spikes — used as context for direction or volatility.
India VIX is the NSE’s measure of expected near-term volatility in Nifty options. Rising VIX usually means wider swells and richer option premiums; falling VIX the opposite.
FAQ
What is a good put-call ratio?
For the CBOE Equity-Only PCR, a neutral reading falls between 0.55 and 0.70. Readings above 1.0 indicate elevated fear, while readings below 0.45 suggest speculative excess. These thresholds do not apply to the Total PCR, which structurally runs higher due to institutional index hedging.
Is a high put-call ratio bullish or bearish?
A high PCR is conventionally bearish — more puts than calls being bought signals downside fear. However, contrarian traders treat extreme spikes above 1.2–1.5 on the equity PCR as bullish reversal signals, because excessive hedging often marks capitulation rather than the start of a sustained decline.
Where can I find the CBOE put-call ratio data?
CBOE publishes daily PCR data for free at cboe.com/data under 'Options Statistics.' End-of-day CSV downloads are available for the Equity-Only, Index-Only, and Total PCR series.
What is the difference between equity PCR and total PCR?
The Equity-Only PCR covers single-stock options and is the most reliable retail sentiment gauge. The Total PCR includes index options like SPX and NDX, which institutional managers buy as portfolio hedges regardless of directional view — causing the Total PCR to structurally trade between 1.0 and 1.3 even in neutral markets.
How do you use put-call ratio with VIX?
High PCR combined with high VIX reinforces genuine fear — both measures confirm panic selling. High PCR with low VIX is less conclusive and may reflect mechanical hedging rather than true bearish sentiment. The two indicators together provide stronger contrarian signals than either alone.
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