Put Call Ratio (PCR) – Simple English Explanation
PCR = Total Put Options / Total Call Options
It shows what traders are expecting in the market.
🔍 What PCR Tells You
1️⃣ PCR > 1 (High PCR)
More Put options are being bought.
Market sentiment = Fear
Many traders expect the market to fall.
Contrarian view → Market may bounce up.
Simple meaning:
👉 Market might be oversold → A rise can come.
2️⃣ PCR < 1 (Low PCR)
More Call options are being bought.
Market sentiment = Greed / Confidence
Many traders expect the market to go up.
Contrarian view → Market may correct down.
Simple meaning:
👉 Market might be overbought → A fall can come.
3️⃣ PCR around 1 (0.90 – 1.10)
Balanced sentiment
Market may stay in range.
🎯 How Traders Use PCR
✔ If PCR > 1.20
Too much fear
Market may go up from support
✔ If PCR < 0.80
Too much greed
Market may fall from resistance
⚠ Important Note
PCR should not be used alone.
Always combine with:
Trend
Support & Resistance
Option Chain
Price Action
PCR = Total Put Options / Total Call Options
It shows what traders are expecting in the market.
🔍 What PCR Tells You
1️⃣ PCR > 1 (High PCR)
More Put options are being bought.
Market sentiment = Fear
Many traders expect the market to fall.
Contrarian view → Market may bounce up.
Simple meaning:
👉 Market might be oversold → A rise can come.
2️⃣ PCR < 1 (Low PCR)
More Call options are being bought.
Market sentiment = Greed / Confidence
Many traders expect the market to go up.
Contrarian view → Market may correct down.
Simple meaning:
👉 Market might be overbought → A fall can come.
3️⃣ PCR around 1 (0.90 – 1.10)
Balanced sentiment
Market may stay in range.
🎯 How Traders Use PCR
✔ If PCR > 1.20
Too much fear
Market may go up from support
✔ If PCR < 0.80
Too much greed
Market may fall from resistance
⚠ Important Note
PCR should not be used alone.
Always combine with:
Trend
Support & Resistance
Option Chain
Price Action
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