Put/Call Ratio
A sentiment indicator that compares the volume of put options traded to call options traded, used to gauge overall market sentiment.
Explained Simply
The put/call ratio divides the total number of put options traded by the total number of call options traded over a given period. A ratio above 1.0 means more puts are being traded than calls, suggesting bearish sentiment. A ratio below 0.7 suggests bullish sentiment. Contrarian investors often use extreme readings as reversal signals — very high put/call ratios can indicate excessive fear (a buying opportunity), while very low ratios can signal complacency (a warning sign). The CBOE publishes daily equity-only and total put/call ratios, and traders often watch 5-day or 10-day moving averages to smooth out noise.
How Tradewink Uses Put/Call Ratio
Tradewink monitors the put/call ratio as part of its multi-factor sentiment analysis system. When the ratio reaches extreme levels, the AI adjusts its conviction scores accordingly — elevated put/call ratios boost bullish signal confidence as a contrarian indicator. The data feeds into the broader Fear and Greed composite alongside VIX, breadth, and options flow metrics.
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See Put/Call Ratio in action
Tradewink uses put/call ratio as part of its AI trading signal pipeline. Start getting signals that use this concept to find real opportunities.