The put/call ratio

简要解答

The put/call ratio divides put volume by call volume for a stock, an index, or the whole market. A ratio of 1.0 means puts and calls traded in equal size; above 1.0 means more puts traded; below it, more calls.

It compresses a full day of options volume into one number, which makes it a quick gauge of which side of the chain was busier. What it shows is lopsided flow, not intent — selling a put and buying a put print the same way, so a high ratio cannot say whether the crowd was seeking protection or supplying it.

Like most flow measures, it is most readable against its own history for the same underlying.

深入了解

A worked example with round numbers:

• Puts traded: 800,000 contracts
• Calls traded: 500,000 contracts
• Put/call ratio: 800,000 ÷ 500,000 = 1.6

Whether 1.6 is notable depends entirely on the baseline. For a broad index, ratios above 1.0 are routine because institutions steadily buy index puts as portfolio insurance; for a single stock that usually runs near 0.5, the same 1.6 would be a sharp departure. The number becomes information only when set against the same underlying's typical range.

Two versions exist. The volume ratio uses the day's trading and moves quickly; the open-interest ratio uses outstanding contracts (see open interest) and drifts slowly. They can disagree: a burst of put trading lifts the volume ratio immediately while barely moving the open-interest ratio if the positions were closed the same day.

The ratio also ignores size and price. 800,000 puts at far-out-of-the-money strikes can represent less premium than 500,000 at-the-money calls, so two markets can share a ratio of 1.6 and look nothing alike underneath. Current ratios across the market appear on the activity page.

选读：详细说明 随堂练习不涉及此内容

Two formal variants exist. The volume ratio is the day's total put volume divided by the day's total call volume; the open-interest ratio divides outstanding put contracts by outstanding call contracts at a point in time. Both are dimensionless, bounded below by zero, and unbounded above. Options Band computes them from delayed Cboe data.

The central misconception is reading a high ratio as bearish consensus. Every put that traded had a buyer and a seller, and the ratio counts the print, not the motive: put buying to hedge stock, put selling to collect premium, and the put leg of a spread are indistinguishable in the total. Market folklore also treats extreme readings as contrarian signals; Options Band presents the ratio as a descriptive statistic and leaves interpretation to the reader.

Limitations: aggregation discards strike and expiration structure, so very different chains can share one ratio; premium is ignored, so many cheap far-out-of-the-money contracts outweigh fewer expensive ones in the count; and on thinly traded underlyings a single large order can move the day's ratio several fold, which makes single-name readings far noisier than index-level ones.