Put-Call Ratio

The Put-Call Ratio (PCR) is a sentiment indicator that measures the relative volume or open interest of put options to call options traded on an underlying asset — such as Nifty 50 or individual stocks — over a given period. It is calculated as: PCR = Put Volume (or Open Interest) ÷ Call Volume (or Open Interest). A PCR above 1.0 indicates more put activity than call activity, suggesting bearish sentiment or heavy hedging demand. A PCR below 0.7 indicates more call activity, suggesting bullish positioning. Contrarian investors often interpret an extremely high PCR as a sign of excessive pessimism — a potential buying opportunity — and an extremely low PCR as a sign of excessive optimism — a potential selling signal. In Indian equity markets, the PCR on Nifty 50 options is one of the most closely watched sentiment indicators, particularly during weekly and monthly expiry cycles when institutional positioning is at its most visible.