The Importance of the Put/Call Ratio

An increase in options volume can offer insight into trader sentiment and potential market opportunities. Traders look to buy Calls to speculate on price gains, and purchase Puts to speculate on price declines. But Put buying can also be associated with hedging and portfolio protection. The Put/Call ratio can be calculated by dividing the number of traded put options by the number of traded call options, and this ratio provides additional insight into how traders are thinking about the market.
When the Put/Call ratio rises, that is an indication of increasing bearish market sentiment. Changes in the Put/Call ratio can often forecast changes in the underlying market trend and are often an excellent early indication of price reversals. In this case, the Put/Call ratio can be used as a contrarian indicator. When there's a higher level of anxiety in the market, a decrease in the Put/Call ratio could be a hint of an upcoming bullish movement.
Join John Rowland, Barchart's Head of Trading Education, as he highlights Barchart’s Unusual Option Volume page. John will discuss how to decipher the data contained within, and what clues the Put/Call ratio provides. John will also show what other classical technical analyses he likes to apply when studying the Put/Call ratio, and how today’s elevated values compare to the peaks of yesteryear.
In the webinar, you will learn about:
Barchart's Unusual Options Volume page
What is the Put/Call ratio and its many implications
The contrarian nature of the Put/Call ratio
Identifying trading opportunities by applying the Put/Call ratio to equities as well as broader market indices
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[@BarchartOfficial]

If you enjoyed this video, please give it a thumbs up and subscribe to the channel. And follow us on Twitter @Barchart for more content! - twitter.com/Barchart

[@1211]

Dear John, people will charge astronomical amount for these types of knowledge but the mere fact you do it for free, I am very thankful. God bless you abundantly.;

[@BarchartOfficial]

Hey Kunle, thanks a lot for watching and the amazing feedback.

[@thegamerboneless2864]

I wish I found you a few years ago. I spent so much time trying to find legit KZbin teachers/professors, tutors. ❤great work I will be following you and learning more.

[@BarchartOfficial]

Thanks a lot for the amazing feedback!

[@BasicallyFreeDFW]

00:00 Intro 01:46 About John/Jean 03:40 Trading Disclaimer 04:24 Options Market Overview ratio 10:10 Unusual Options Volume 16:46 Put/Call Ratio 19:06 Example 20:30 Details Breakdown 24:51 Credit/Debit Spread Details 26:55 Implied Volatility 27:45 Bearish Sentiment Example 33:16 Example 2 39:27 Equity Put Call Ratio interactive chart 49:24 Barchart Features 52:07 Put/Call Ratio Indicator 58:01 $AAPL example 01:00:48 Q/A 01:03:08 Takeaway

[@BarchartOfficial]

Thank you!!

[@dariusmaize3925]

Put this video on repeat, Call John and say Thanks! Thanks John.

[@BarchartOfficial]

Thanks a lot for that feedback!

[@alfarnese5641]

Thank You for video 😎

[@BarchartOfficial]

Thanks a lot for watching!

[@thegamerboneless2864]

If folks have trouble learning ratios, some say their are 6 crucial ones but their are many. Pick the ones you like to use for your analysis or think you will like, then learn 1-3 at a time, just go through random stocks and find the data and do the formulas. If your on the toilet practice, if your sitting watching tv see how many times you can do it while a commercial is on. In a few weeks or month or so you will be-able to do the formulas, in your head. Good luck folks glad to see so many learning to work money

[@BarchartOfficial]

Thanks a lot for sharing your thoughts!

[@ALFTHADRADDAD]

John is the champ! Excellent info everytime!

[@BarchartOfficial]

Thank you very much for watching and for that amazing feedback!

[@carlosurrutiabruzon541]

Great presentation

[@BarchartOfficial]

Hey Carlos, thanks for watching and the compliment. Really appreciate it!

[@dspawar8690]

Is there no way to get p/c ratio data for intraday? Daily data kind of becomes obsolete to use.

[@BarchartOfficial]

Great question! Please email [e-mail] and one of our team members can assist with that. Thank you!

[@Tha.Black.Profit]

20:04 this was a good trade. Peaked to $3 on the expiration date.

[@BarchartOfficial]

Thanks a lot for watching! Hoping we all hit a ton of winners in 2024.

[@Kk-iw4ck]

Good stuff thank you !

[@BarchartOfficial]

Thanks a lot for watching!

[@ritterac]

Is this free data or paid subscription data?

[@BarchartOfficial]

Hey Angela, thanks for watching. Depends on which information you're referring to. You can access the Options Market Overview page which has the market put/call ratios for free - www.barchart.com/options. However, some of the advanced screeners will require a paid Premier account, however you're currently able to get a 30-day risk-free trial. www.barchart.com/get-barchart-premier?ref=signUp

[@TraderQuant]

Great information but I don't think the presenter created the indicator slide at the end. Since he didn't notice or mention that the MACD was not based on the instrument price but on the Put/Call ratio. Looks like some assistant made that setup and failed to mention that setting ;))

[@BarchartOfficial]

Hey TraderQuant, thanks a lot for watching and the feedback!

[@johnrowland2234]

I can assure you that I did create the indicator. If you listen closely in the presentation, at the end, I answer a question that addressed the MACD was for the P/C ratio, and that there was a long connection trying to predict a price change of the underlying with a value of the P/C ratio. Hence, not to use as an entry system but to enhance other trading processes. To your point it might be more effective if the MACD was of the underlying security, but unfortunately the Barchart graphics don’t allow that crossover. Thanks again for your feedback and it’s much appreciated

[@TraderQuant]

@@johnrowland2234 Sorry Sir, I missed the end part. My bad. BTW I really look fwd to your videos with deeper insights than the typical stuff found on youtube like COT, P/C Ratio etc. Please keep them coming...

[@1santiago.puentes]

Recommended playback speed 1.25.. give it a try lol

[@BarchartOfficial]

Thanks (we think) lol

[@yousefghassemi1412]

Good advice 👍😃

[@cedric9115]

IMO, put call ratio tells nothing, since it takes into account put volume/ call volume, but the put volume consists of position to enter or exit. Besides, even if it solely take into account long put volume/long call volume only. It doesn't differentiate who is behind the long put/long call, smart money or dumb money. Unless one has ways to separate out all of this

[@BarchartOfficial]

Thanks for watching and sharing your thoughts!