Equity

Put-Call Ratio

Definition

The ratio of put option volume to call option volume for a given security or index, used as a contrarian sentiment gauge. High readings indicate bearishness; low readings indicate bullishness.

Formula / Rules
Put-Call Ratio = Put Volume / Call Volume
Example
A put-call ratio above 1.0 often signals excessive bearishness and a potential market bottom.
Related Terms
Implied Volatility (IV) Sentiment Analysis Volatility Index (VIX)
Frequently Asked Question
What is the Put-Call Ratio?
The put-call ratio divides put volume by call volume to gauge sentiment. Values above 1.0 suggest excessive bearishness (contrarian buy signal); values below 0.7 suggest excessive bullishness.
APA Citation
Clark, R. (2025). Put-Call Ratio. VixShield Trading Glossary. Retrieved from https://www.vixshield.com/glossary/put-call-ratio
RC
Russell Clark, FNP-C
Author of SPX Mastery series · Founder of VixShield
Last updated:  ·  Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.