PCR — Put-Call Ratio as Sentiment Gauge
Total put OI ÷ total call OI. Most useful at extremes — contrarian indicator.
PCR = total put OI ÷ total call OI. Above 1 means more puts open than calls. Below 1 means more calls.
PCR is most useful at extremes — high PCR is contrarian bullish, low PCR is contrarian bearish.
Reading PCR levels
PCR < 0.7: heavily call-positioned. Bullish extreme. Correction risk rising.
PCR 0.7-1.0: moderately bullish positioning. Normal range.
PCR 1.0-1.5: moderately bearish positioning. Normal range.
PCR > 1.5: heavily put-positioned. Bearish extreme. Short-squeeze potential.
The 5-day trend matters more
Today's PCR is one data point. The 5-day rolling PCR shows the direction of institutional positioning.
Rising PCR over 5 sessions = put accumulation = institutions building protection or bearish bets.
Falling PCR = put unwinding = sentiment shifting bullish.
Common misreads
- Treating PCR as direction-following. It's a contrarian indicator at extremes.
- Reading single-day PCR. The trend is the signal.
Key takeaways
- PCR = put OI / call OI.
- Below 0.7 = bullish extreme (correction risk).
- Above 1.5 = bearish extreme (squeeze risk).
- 5-day trend matters more than today's snapshot.
PCR practical
What's a 'normal' NIFTY PCR?
0.9-1.2 covers most trading days. Outside this range, sentiment is positioning toward one side.
Is BANK NIFTY PCR comparable to NIFTY?
Roughly yes — same calculation. BANK NIFTY PCR can be more volatile because of concentrated banking-stock exposure to news.
Does Strota track PCR history?
Yes — /nifty-option-chain shows current PCR and 5-day trend.