The put-call ratio, or PCR, is one of the most quoted numbers in Indian options. It is simple to calculate and easy to misread.
How it is calculated
The most common version uses open interest (OI), the number of option contracts still open:
PCR = total put OI ÷ total call OI
If NIFTY puts have 1,20,00,000 contracts open and calls have 1,00,00,000, the PCR is 1.2. A volume PCR uses the contracts traded today instead of the contracts still open.
How traders read it
Every open option has a buyer and a writer (seller). Writers usually hold larger, longer positions, so many Indian traders read OI from the writer's side:
- Rising PCR: more puts being written, often read as writers expecting support below the price.
- Falling PCR: more calls being written, often read as writers expecting resistance above.
- Extreme readings: very high or very low values can mean the crowd is leaning heavily one way, which is exactly when surprises hurt the most.
Context beats one number
A PCR of 1.2 can mean different things on different days. Read it alongside:
- The PCR trend through the day, not a single snapshot.
- OI by strike: where the biggest call and put walls sit.
- Expiry: weekly and monthly expiries behave differently, and positions change fast near expiry.
- The price trend and implied volatility.
In Levels 2 and 3, students track PCR, OI walls, Greeks, IV and build-up live with ITA's own PCR & OI Software, and learn to read them as context, never as a tip.
Eight tested strategies, ITA's own tools, and AI as your research analyst.
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