Put-Call Ratio Explained
Put-call ratio explained. Learn how PCR is calculated, what high or low readings can imply, and how to use it responsibly.
Frequently asked questions
Does a high put-call ratio mean the stock will go up?
Not necessarily. High PCR can reflect hedging or bearish positioning, but price direction depends on many factors. Treat PCR as a sentiment indicator, not a standalone trading signal.
Should I use PCR for indexes or individual stocks?
Both can be useful. Index PCR can provide broad market sentiment context, while single-stock PCR helps you analyze positioning on a specific name. Historical comparison is important in either case.
What timeframe is best for PCR analysis?
Short-term traders often monitor daily volume PCR, while longer-term analysis may use open interest PCR. Match the timeframe to your trading horizon and review process.