Put Call Ratio Live

Last updated on 
December 13, 2024 | 03:59 PM

The put call ratio is a key indicator in option trading, comparing the number of call options purchased to the number of put options. It helps investors make informed trading decisions.

Nifty 50
19-Dec-2024
26-Dec-2024
02-Jan-2025
09-Jan-2025
Call OI
Put OI
PCR OI
6,06,96,325
6,62,46,275

1.09

Call Vol
Put Vol
PCR Vol
11,78,45,175
10,56,59,850

0.9

Historical PCR Of Nifty 50

DatePCR
12-12-20240.581
14-11-20240.784
21-11-20240.802
28-11-20240.722
05-12-20241.090

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Stock Option Chain Data

Stock
Index

Select Expiry Date

SymbolPut (OI)Call (OI)Ratio (OI)Put (Vol)Call (Vol)Ratio (Vol)
IDEA47,90,40,0001,07,16,80,0000.457,02,00,00041,59,20,0000.17
TATASTEEL10,89,05,50017,51,47,5000.6216,67,93,00027,34,76,5000.61
YESBANK8,29,92,00017,45,38,0000.484,36,54,00013,18,98,0000.33
PNB9,15,60,00014,47,44,0000.6311,86,64,00018,66,16,0000.64
IDFCFIRSTB9,35,77,50013,35,97,5000.74,83,90,0007,33,57,5000.66
CANBK9,07,26,75011,79,36,0000.7714,80,68,00019,34,68,5000.77
RELIANCE5,20,89,5009,86,53,0000.537,30,70,75014,54,15,5000.5
GMRAIRPORT7,73,04,3858,43,80,6350.922,66,73,7507,15,16,2500.37
ONGC2,64,34,1007,92,33,0000.332,86,72,8755,38,03,7500.53
IOC5,12,36,2507,51,72,5100.687,87,11,75015,94,75,8750.49
NTPC2,31,06,0007,17,22,5000.328,44,26,0008,92,21,5000.95
TATAMOTORS3,00,67,9507,13,76,8000.423,92,32,6007,31,28,5500.54
MOTHERSON3,27,45,2006,67,32,9000.492,47,54,1505,11,55,5000.48
WIPRO5,27,95,5006,36,40,5000.835,46,82,5007,59,19,5000.72
BEL4,95,18,7506,17,88,0000.83,98,34,4505,93,08,5000.67
NATIONALUM2,72,25,0005,90,81,2500.4647,25,0001,04,32,5000.45
SAIL4,12,16,0005,85,12,0000.77,93,20,00011,28,64,0000.7
ITC2,66,27,2005,72,14,4000.474,91,92,0008,26,59,2000.6
IRFC2,13,36,8255,59,91,1000.382,48,68,8755,46,76,2750.45
ZOMATO4,06,00,0005,54,66,0000.734,70,24,0005,12,66,0000.92
Symbol

What is the Put Call Ratio?

A put-call ratio is a derivative indicator used by traders to assess the sentiment of the options market. It calculates by factoring in open interest or options trading volume. PCR, or PCR, is a contrarian indicator that focuses on option buildup, helping traders determine the market's bullish or bearish sentiment. This helps traders decide whether to take a contrarian position in the market.

How to Analyse PCR (Put Call Ratio) ? 

Let us examine the interpretation of PCR analysis with option sellers, the dominant participants in the market, in mind, in contrast to the general public, who typically participates in the purchasing side of the transaction.
 

Put / Call Ratio

Interpretation

If the Nifty put call ratio

 rises when little declines are purchased into an upward-rising market

A positive indication. In anticipation of the upswing continuing, it indicates that put writers are actively writing during dips.
If the put-call ratio falls as the markets are assessing the levels of resistanceA bearish signal. It indicates that call writers are opening new positions in anticipation of either a market pullback or a restricted upside.
If the put-call ratio falls in a market that is heading downwardBearish signal. It indicates that call option strikes are being aggressively sold by option writers.

How is PCR Calculated?

The interpretation of the put-call ratio (PCR) varies depending on the type of investor. Here is the call ratio formula:

Based on Open Interest of a Specific Day

Alternatively, the PCR may be determined based on the trading volume of put and call options on a given day. This strategy gives information on the current market attitude based on the day's trading activities.
 

Formula: PCR = Total trading volume of put options / Total trading volume of call options.

 

Example:  Consider the trading volume on a given day for "ABC Ltd" on the National Stock Exchange (NSE).


 

  • The total trading volume of ABC Ltd's put options is 3.000 contracts.
  • Call options on ABC Ltd had a total trading volume of 6,000 contracts.
  • The calculation is: PCR 3,000 (Put options)/6,000 (Call options) = 0.5.


 

In this case, ABC Ltd's put call ratio on that particular day is 0.5.

Based on the Volume of Options Trading

The PCR is computed by dividing the total open interest of outstanding put options by the total open interest of outstanding call options for a certain security or market.
 

Formula: PCR = Total open interest of put options divided by Total open interest of call options.
 

Example: Assume we wish to determine the put call ratio for "XYZ Ltd," which is listed on the Bombay Stock Exchange (BSE).
 

  • The total open interest in put options on XYZ Ltd is 5,000 contracts.
  • The total open interest in call options on XYZ Ltd is 10,000 contracts.
     

To calculate PCR, use the formula: PCR = 5,000 (put options)/10.000 (call options) = 0.5.
 

In this circumstance, XYZ Ltd's put call ratio is 0.5.

Why Is PCR Important?

The put/call ratio is an essential metric that traders use to evaluate market sentiment. PCR live assists traders in determining the price movement of the underlying security and guiding them to put directional bets on equities. As a contrarian signal, it helps traders avoid the trap of Herd Mentality. The Put/call ratio is also used to examine the whole trading activity of market players because it is computed in terms of both open interest and volume.

Advantages of Put Call Ratio & Disadvantages of Put Call Ratio 

Here are the advantages and disadvantages of put call ratio:

Advantages of Put Call Ratio

Disadvantages of Put Call Ratio

Market Sentiment: Provides a snapshot of market sentiment, helping traders and investors understand whether the market is leaning towards bullish or bearish sentiment.Inaccuracy: The PCR does not give precise price goals or market movement timeframes. Although it may not forecast exact market moves, it provides an overview of the sentiments.
Contrarian Indicator: Functions as a contrarian signal. Extreme PCR readings, either very high or very low, may signal an impending turnaround in the market mood or an optimistic or gloomy outlook.Options Expiration: As options go closer to expiration, the PCR may be affected. Options have the potential to temporarily affect market sentiment when they expire by skewing the ratio.
Risk Management: By tracking the PCR, traders can assess the risk and make more informed decisions. A bearish PCR may lead to protective actions, while a bullish PCR encourages risk-taking.Over-reliance: It might be dangerous to base all of your trading decisions only on the PCR. Other aspects, such as technical and fundamental analysis, must be taken into account.
Volatility Indicator: Since more traders and investors are purchasing put options as a hedge against possible negative risks, an increase in PCR is frequently linked to higher market volatility.Different Interpretations: Because the PCR is only one indication out of many employed in the market, experts' interpretations of it might differ.
Leading Indicator: When extreme levels are attained, the PCR may occasionally serve as a leading indicator of market moves.-

4 ways to Interpret ‘Nifty Put Call Ratio Live Chart’ and Nifty Spot Correlation

  1. If the PCR (Put Call Ratio) rises during a downturn in an upward going market, this is a very positive indicator. This suggests that Put writers are actively writing at dips. Keep a watch on this chart for the retracement % of the previous climb during a decline.
  2. If the PCR is continuously rising during the day along with the Nifty spot, it's also considered positive.
  3. If the PCR falls when the Nifty spot is around the barrier level, this is a negative indicator. This suggests that bulls are afraid of bears.
  4. If PCR falls during a correction in a downward falling market, this is an extremely negative indicator. It suggests that either call writers are aggressively writing at every uptick, or put writers are closing their positions to reduce losses. While keeping a watch on this chart, look for the retracement % from last autumn during the downturn.

How to Trade Using a Put-Call Ratio? 

Here is how you can trade using a put-call ratio:

  1. Understanding the Put-Call Ratio (PCR): The ratio is derived by dividing the total open interest of put options by the total open interest of call options. It enables traders to measure market mood and probable future price fluctuations.
  2. Interpreting PCR values: A high put-call ratio (above 1) shows a pessimistic mood, indicating that investors are more likely to purchase put options, maybe expecting a market downturn. A low put-call ratio (less than 1) indicates a positive mood, with a preference for call options, presumably expecting a market gain.
  3. Assess the PCR using strike prices of options: Illiquid assets may have lower trading volumes, making strike price an important consideration. Analysing striking prices might reveal information about market expectations.
  4. Evaluate trade volumes for put and call options: Examine the strike price and expiration date of a certain asset to assess the overall directional movement. Higher trade volumes may suggest a stronger market consensus.
  5. Examining open interest: Open interest is the total number of outstanding contracts for a certain option. To measure trade volume in both put and call options over a given time period, use the PCR with open interest.

Interpretation of PCR

The put call ratio can be interpreted in several ways:

  • PCR < 1: When the PCR is less than 1, it indicates more open call contracts than put contracts, suggesting a bullish market sentiment. Traders and investors expect the underlying asset's price to rise.
  • PCR > 1: When the PCR is greater than 1, it indicates more open put contracts than call contracts, suggesting a bearish market sentiment. Traders and investors anticipate the underlying asset's price to fall.
  • PCR = 1: When the PCR is close to 1, it implies a balanced sentiment in the market, with no strong bias towards either bullish or bearish views from investors and traders.

FAQs on PCR Ratio

High PCR indicates excessive put purchasing by small and medium-sized investors, as well as aggressive selling by more experienced traders.

There is no defined number; instead, previous data must be compared, such as one-month or three-month averages. PCR, like the other technical and derivative indicators, should be utilized in conjunction with them and understood in light of the present market condition.

A Put Call Ratio larger than one means that the market has traded more puts. This might indicate a gloomy market mood. Because traders expect a market downturn, they are trading put options rather than call options.

The ideal PCR ratio may vary depending on the specific experimental conditions and the desired level of amplification. However, a PCR ratio close to 1:1 (input:output) is often considered ideal for efficient and unbiased amplification.

Several factors can influence the PCR ratio, including the quality and quantity of starting material, primer design, PCR conditions (such as annealing temperature and cycle number), and the efficiency of the polymerase enzyme.

A high PCR indicates pessimistic sentiment, whereas a low PCR indicates positive feeling.

A declining put-call ratio, which is less than 0.7 and approaching 0.5, is considered a positive indication.

The put-call ratio can offer insights into market sentiment, but it is not always a reliable measure for forecasting future market conditions and should be used alongside other indicators.