Want to Learn Options Trading? Well then learn from the very best! Watch this video to learn how to trade options – Must Watch for Stock Market Beginners. However, generally traders will anticipate the market top or bottom by looking for spikes in the Put Call ratio or for when the ratio reaches levels that are outside of the normal trading range. The general trend of the NIFTY Put call ratio is such that NIFTY put call ratio seems to oscillate between 0.8 and 1.3 with 0.8 being the lower band and 1.3 being the upper band. This means that many traders will consider a high Put Call ratio of say 1.4 a sign of a buying opportunity because they believe that the sentiment in the market is extremely bearish and that it will soon adjust, when those with short positions start looking for places to cover and market will eventually bottom out.īut Put Call Ratio is no magic number that indicates that the market has created a bottom or a top. The Put Call Ratio is generally used by traders as a contrarian indicator when the values reach relatively extreme levels.
For example, for Nifty, a Put Call Ratio of 1.4 may indicate extreme bearishness but for a stock like Reliance, a Put Call Ratio of 1.2 may not be enough to indicate the same. To conclude, the Index options Put Call Ratio and Stock Options Put Call Ratio should be evaluated independently. The extreme PCR values for different indexes and stocks are different and it helps to plot daily PCR historically to identify these extreme values.
NIFTY Put Call Ratio Live from NSE India website Put Call Ratio Analysis and Interpretation – How to Analyse Put Call Ratio? Put Call Ratio = 8,00,000/10,00,000 = 0.8 How can one calculate the NSE Put Call Ratio in Real Time?įor common retail investors, put call ratio is readily available from the NSE website from the following link…
Put Call Ratio Formula = Traded Volume of Puts / Traded Volume of Calls OR Put Call Ratio Formula = Open Interest of Puts / Open Interest of Callsįor example, if the total open interest of both Calls and Puts on 1 st September is 10,00,000 and 8,00,000 respectively then, The calculated value usually ranges from 0.5 to 1.50. To calculate Put Call Ratio, you need to divide the total open interest (OI) of Puts by the total open interest of Calls. Put Call Ratio Formula – How to Calculate the Put Call Ratio? But several traders also use volumes to calculate the Put Call Ratio. Usually open interest is used to calculate the Put Call Ratio.