Thursday, September 06, 2007

Put-call ratio (PCR)


Put call ratio (PCR), which is the number of put options divided by the number of call options, is a popular sentiment indicator of option traders worldwide.

For starters, a put option allows the buyer the right, but not the obligation to sell a contract to the writer (seller), while a call option gives the buyer the right, but not the obligation to buy a contract from the writer.

When an investor buys a put option, it means he expects the markets to fall.
When an investor buys a call option, he expects the market to rise.

So, a rising PCR would mean investors are buying more puts or reducing calls.
And a falling PCR would indicate that call options are being added and put options being reduced.


This plunge reflects a bullish sentiment, as the put-call ratio is one of the best gauges to judge oversold (too bearish) or overbought (too bullish) zones.

......more to come........................
Post a Comment

Popular Posts for last 7 days

All Time Popular Posts

Eq mkt Holidays for the 2017 year

Sr. No.

DateDayDescription
126-Jan-2017ThursdayRepublic Day
224-Feb-2017FridayMahashivratri
313-Mar-2017MondayHoli
404-Apr-2017TuesdayRam Navami
514-Apr-2017FridayDr.Baba Saheb Ambedkar Jayanti/ Good Friday
601-May-2017MondayMaharashtra Day
726-Jun-2017MondayId-Ul-Fitr (Ramzan ID)
815-Aug-2017TuesdayIndependence Day
925-Aug-2017FridayGanesh Chaturthi
1002-Oct-2017MondayMahatama Gandhi Jayanti
1119-Oct-2017ThursdayDiwali-Laxmi Pujan*
1220-Oct-2017FridayDiwali-Balipratipada
1325-Dec-2017MondayChristmas

*Muhurat Trading will be conducted. Timings of Muhurat Trading shall be notified subsequently.

The holidays falling on Saturday / Sunday are as follows:

Sr. No.DateDayDescription
109-Apr-2017SundayMahavir Jayanti
202-Sep-2017SaturdayBakri ID
330-Sep-2017SaturdayDasera
401-Oct-2017SundayMoharram
504-Nov-2017SaturdayGurunanak Jayanti