Options trading
Put/call ratio (PCR)
Definition
Put volume divided by call volume, or put open interest divided by call open interest, for a market, an index or a single stock over a set period.
Example
Say 180,000 puts and 150,000 calls trade on an index in one day. The put/call ratio by volume is 180,000 ÷ 150,000 = 1.2, or 1.2 puts for every call. A reading above 1 is often taken as a sign of caution, but part of that put volume may simply be investors hedging shares they already hold.
Hypothetical numbers, for illustration only.
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