Investor Glossary-put/call ratioInvestor Glossary-put/call ratioInvestor Glossary-put/call ratioInvestor Glossary-put/call ratioInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Put/call Ratio

The HTML to link to this page
 

The put/call ratio is the volume of put options divided by the volume of call options for a specified period of time. Technical analysts use the put/call ratio to predict market turning points. The put/call ratio is generally considered a contrarian indicator. A high put/call ratio occurs when there is a high volume of put options being traded, and a low put/call ratio indicates that a larger percentage of call options are being purchased. To a contrarian investor, a significantly high put/call ratio suggests that investors are overly pessimistic and therefore indicates a market bottom, while a significantly low put/call ratio suggests that investors are overly optimistic and therefore implies a market top. The put/call ratio must be used with caution as unusual market conditions can cause short-term anomalies in apparent market sentiment, giving analysts a misleading put/call ratio indication.



Rate this put/call ratio definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: inflation, EBITDA, average price per share, current ratio, FTSE, 1035 exchange, LIBOR, annual return, deferred revenue, option premium, 401a, command economy, open position, real GDP, implied volatility, in escrow, quality assurance, cancelled check, dividends payable, covered put, stock split, 1031 exchange, class C shares, required rate of return, ex-dividend, limit order, risk management, Zero Cost Collar, reverse mortgage, minority interest, VIX, deferred tax, Key Rate Duration, margin rate, wholly-owned subsidiary, APR, 144a, diluted share, stock market close, FICO score, ex-dividend date, phantom income, per diem, debt service coverage, balance sheet, retained earnings, irrevocable trust, labor relations, liquidity ratio


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use