Put Call Ratio is the ratio of the amount of put options traded versus the amount of call options traded.
Put Call Ratio is one of the two indicators directly derived from options trading,the other one is VIX.Put Call Ratio is used by options traders around the world as a contrarian indicator of market sentiments.As a indicator of market sentiment,Put Call Ratio tells you when investors are in a bullish or bearish mood.
Here is a simple formula for calculating Put Call Ratio.
Volume of Put options/Volume of call options
Wednesday, August 5, 2009
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