Put-Call Ratio

The ratio is read as a sentiment measure, with high readings taken to indicate defensive positioning, but the interpretation is unreliable because the same option can be bought or sold and the data does not say which. A large put open interest may be hedging, income-seeking writing, or a bearish bet, and these imply opposite things. Volume-based and open-interest-based versions behave differently and are not interchangeable. Practitioners often use it as a contrarian measure, which is an interpretation this dictionary reports without endorsing.