Options
Put-Call Ratio (PCR)
The ratio of put options volume or open interest to call options volume or open interest: a sentiment indicator showing the market's aggregate directional lean at a given moment.
How Draconic reads it
A high PCR — above 1.2 for NIFTY as a general reference — indicates heavy put buying relative to calls, reflecting either bearish positioning or elevated hedging demand. A low PCR below 0.7 indicates call-dominant activity, reflecting bullish sentiment or complacency. PCR functions best as a contrarian indicator at extremes: extreme put buying often coincides with market bottoms where downside fear has peaked; extreme call buying often coincides with tops where complacency has peaked. PCR as a standalone signal is noisy and unreliable. PCR in context with OI concentration, gamma regime, and flow data becomes a meaningful component of the broader options landscape read.
See today's NIFTY option-chain PCR — free, updated each session.
Worked example
Suppose NIFTY has fallen hard into the afternoon and the PCR (open interest) pushes above 1.4 — heavy put positioning. Read mechanically that looks bearish, but at an extreme it is often the opposite: fear and hedging have peaked, and a contrarian bounce becomes more likely. The mirror case is a PCR near 0.6 after a long rally — call-heavy complacency that frequently marks a local top. On its own PCR is noisy; alongside OI concentration and the gamma regime it becomes a usable sentiment read. (Illustrative, not a recommendation.)
Related terms
Frequently asked
What is a good put-call ratio?
There is no single "good" number — PCR is read relative to its own range. As a rough NIFTY reference, above ~1.2 is put-heavy (often contrarian-bullish at extremes) and below ~0.7 is call-heavy (often contrarian-bearish at extremes).
What does a high vs low PCR mean?
A high PCR means puts dominate — bearish positioning or heavy hedging; a low PCR means calls dominate — bullish sentiment or complacency. PCR works best as a contrarian indicator at extremes, not as a trend-following signal.
Is PCR based on volume or open interest?
Both versions exist. Volume PCR reflects the current session's activity; open-interest PCR reflects standing positioning. OI-based PCR is generally steadier and more useful for reading how the market is positioned into an expiry.
Educational only. Not financial advice. Trading involves risk.