Put/Call Ratio

DateValueNifty(%CH)Bank Nifty(%CHG)


What is Put Call Ratio?

Put-call ratio (PCR) is a contrarian indicator commonly used to determine the overall mood of the market. A put-call ratio is a derivative indicator specially used for option trading. Being a contrarian indicator, the ratio looks at options buildup, helps traders understand whether a recent fall or rise in the market is excessive and if the time has come to take a contrarian call.

Put call ratio is computed either by factoring in the open interest for a given period or based on the volume of options trading.

How put call ratio is calculated?

PCR is calculated by dividing the number of open interest in a Put contract by the number of open interest in Call option of the same strike price and expiry date. It can also be calculated by dividing put trading volume by call trading volume.

What is good nse put call ratio?

An average nse put-call ratio of 0.7 for equities is considered a good basis for evaluating sentiment. In general: A rising put-call ratio, or a ratio greater than 0.7 is Bullish sentiment.

What if pcr is more than 1?

A PCR above 1 indicates that the put volume has exceeded the call volume. It indicates an increase in the bearish sentiment. Means bearish view is increasing for the market. A PCR below 1 indicates that the call volume exceeds the put volume. It signifies a bullish market ahead.

What does a put call ratio of 0.5 mean?

A put call ration nse value below 0.7 and approaching 0.5 is indicative of a strong bullish sentiment in the markets as more Calls are being bought as compared to the Puts.

Which PCR is bullish or bearish?

No PCR is considered ideal. But a PCR below 0.7 is typically viewed as a strong bullish sentiment while a PCR above 1 is typically viewed as a strong bearish sentiment.

When PCR is oversold?

An average put-call ratio of 0.7 for equities is considered an oversold market while above 1.5 is considered overbought. For Indian markets, Nifty is a widely traded option and as the benchmark index, the Pull call ratio will define the market trend.

What is Nifty put call ratio range?

NIFTY Put call ratio range is between 0.8 and 1.3. Below 0.8 being lower band, is considered  bullish and above 1.3 being the upper band, considered bearish due to its contrarian nature.

How do you predict call or put?

The Put-Call Ratio (PCR) PCR is the standard indicator that has been used for a long time to gauge the market direction. This simple ratio is computed by dividing the number of traded put options by the number of traded call options.

Which is the best trend indicator?

Most popular trend indicators are the Bollinger Band, MACD, Relative Strength Index, On-Balance Volume (OBV) and the Parabolic SAR.

How do you know if Nifty is bullish or bearish?

Nifty put call ratio should be below 0.8 and RSI between 55 to 60 is interpreted as a bullish condition. RSI reading greater than 75 is interpreted as an overbought. If Nifty put call ratio is greater than 1 and RSI is above 75, then it can be considered bearish.