Put/Call Ratio

The put/call ratio is a sentiment indicator that compares the volume of put options (bets that a market will fall) to call options (bets that a market will rise). A high put/call ratio suggests investors are predominantly bearish — often a contrarian signal that the market may be oversold and due for a bounce. A low ratio indicates excessive optimism, which can precede a correction. Traders use the put/call ratio as a gauge of crowd psychology rather than a directional trading tool on its own. When combined with other sentiment indicators and the VIX, it becomes a powerful input for identifying market extremes.

At One-Signal, the put/call ratio is one of several sentiment inputs used to generate our daily trading signals across Gold, Silver, Oil, Bitcoin and the S&P 500. Our system identifies when sentiment is stretched and positions accordingly — systematically, not emotionally.