What is Put/Call Ratio?
Put/Call ratio (PCR) is a popular derivative indicator, specifically designed to help traders gauge the overall mood of the market. The ratio is calculated either on the basis of options trading volumes or on the basis of the open interest for a particular period. If the ratio is more than 1, it means that more puts have been traded during the day and if it is less than 1 it means more calls have been traded. The PCR can be calculated for the option segment as a whole which includes individual stocks as well as indices.
Put/Call ratio (PCR) is a popular derivative indicator, specifically designed to help traders gauge the overall mood of the market. The ratio is calculated either on the basis of options trading volumes or on the basis of the open interest for a particular period. If the ratio is more than 1, it means that more puts have been traded during the day and if it is less than 1 it means more calls have been traded. The PCR can be calculated for the option segment as a whole which includes individual stocks as well as indices.
PCR Analysis
Let’s see how PCR analysis can be interpreted taking option sellers into consideration who are the major players in the market as compared to the retail public who are usually on the buying side of the trade.
Put / Call Ratio
|
Interpretation
|
If put call ratio increases as minor dips getting bought in during an up trending market
|
Bullish Indication. It means the put writers are aggressively writing at dips expecting the uptrend to continue
|
If put call ratio decreases while markets testing the resistance levels
|
Bearish Indication. It means call writers are building fresh positions, expecting a limited upside or a correction in the market.
|
If put call ratio decreases during down trending market
|
Bearish indication. It means option writers are aggressively selling the call option strikes.
|
Following is the list of stocks that have witnessed maximum change in their Put-Call ratio in yesterday's trade:
PCR Open Interest
Underline
|
Current
|
Previous
|
% Change
|
MRPL
|
1.03
|
0.54
|
0.90
|
INFY
|
0.86
|
0.58
|
0.46
|
KSCL
|
0.78
|
0.53
|
0.46
|
BANKNIFTY
|
0.97
|
0.70
|
0.38
|
NCC
|
0.41
|
0.30
|
0.38
|
BERGEPAINT
|
0.57
|
0.42
|
0.37
|
BHARATFORG
|
0.41
|
0.63
|
(0.35)
|
YESBANK
|
0.56
|
0.42
|
0.35
|
IGL
|
0.40
|
0.61
|
(0.33)
|
BALRAMCHIN
|
0.50
|
0.38
|
0.32
|
No comments:
Post a Comment