Understanding Equity Put/Call Ratios
An increase in options volume can provide clues into trader sentiment and potential market opportunities. Traders look to buy call options to speculate on price increases, and purchase put options to speculate on price declines.
However, puts 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 can provide additional insight into how traders are thinking about the market.
Huge thanks to Gavin McMaster, the founder of Options Trading IQ, for creating this video on our behalf.
If you want to learn more about Options Trading IQ, visit their website at: https://optionstradingiq.com/. You can also follow Gavin McMaster on Twitter @OptiontradinIQ.
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