What is PCR?
The Put-Call Ratio (PCR) is a popular market sentiment indicator used in option trading. It helps traders understand whether more people are buying put options (bearish bets) or call options (bullish bets) at a given time.
Put Options: Contracts betting the price will go down.
Call Options: Contracts betting the price will go up.
How to Read PCR?
PCR < 1: More call options → Bullish sentiment.
PCR > 1: More put options → Bearish sentiment.
PCR = 1: Neutral sentiment.
But extreme values often suggest the opposite:
Very High PCR: Possible market reversal upwards (too many bearish bets).
Very Low PCR: Possible market reversal downwards (too many bullish bets).
Example:
Put OI: 5,00,000 contracts
Call OI: 10,00,000 contracts
PCR = 5,00,000 / 10,00,000 = 0.5 → This indicates bullish sentiment.
Why PCR Matters?
Helps identify market mood (bullish or bearish).
Gives contrarian signals (overcrowded trades can reverse).
Used in option trading strategies for timing entry and exit.
The Put-Call Ratio (PCR) is a popular market sentiment indicator used in option trading. It helps traders understand whether more people are buying put options (bearish bets) or call options (bullish bets) at a given time.
Put Options: Contracts betting the price will go down.
Call Options: Contracts betting the price will go up.
How to Read PCR?
PCR < 1: More call options → Bullish sentiment.
PCR > 1: More put options → Bearish sentiment.
PCR = 1: Neutral sentiment.
But extreme values often suggest the opposite:
Very High PCR: Possible market reversal upwards (too many bearish bets).
Very Low PCR: Possible market reversal downwards (too many bullish bets).
Example:
Put OI: 5,00,000 contracts
Call OI: 10,00,000 contracts
PCR = 5,00,000 / 10,00,000 = 0.5 → This indicates bullish sentiment.
Why PCR Matters?
Helps identify market mood (bullish or bearish).
Gives contrarian signals (overcrowded trades can reverse).
Used in option trading strategies for timing entry and exit.
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Details:
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WhatsApp: wa.me/7678446896
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
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Hello Everyone! 👋
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Penerbitan berkaitan
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.