Put-Call Ratio
a.k.a. CBOE put-call ratio, PCR
The number of put options traded divided by the number of call options, used as a gauge of fear versus greed.
In plain English
The number of put options traded divided by the number of call options, used as a gauge of fear versus greed.
A put option profits when prices fall; a call profits when they rise. The put-call ratio compares the volumes. A high ratio means lots of people are buying downside protection; a low one means heavy betting on gains.
Many traders read extremes as contrarian signals: when fear is everywhere, the selling may be nearly exhausted. The Cboe publishes several versions for stocks and indexes.
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