//Put Call Ratio Analysis for Stock Traders
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How to Read the Put to Call Ratio

The CBOE Options Put/Call Ratio is a contrarian indicator commonly used
by investors to gauge overall sentiment. The close today indirectly
suggests a rally could be looming around the corner.

The lower the reading then the more call volume is being traded versus put volume, suggesting investors are bullish
on the market. On the contrary a high reading above 1.0 means there is
more put volume versus call volume, suggesting investors are bearish overall.

As can be seen the ratio has a recent trading range of about .75 – 1.15

How to Read the Put to Call Ratio

On Wed., the ratio spiked to over 1.55. This is a major contrarian signal to be biased on the long side in the near term.

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This entry was posted on Thursday, February 19th, 2009 at 9:04 am and is filed under Technical Analysis. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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