The Put Call Ratio (PCR) is a tool in the stock market to understand how investors feel about a stock or the market's future. It compares the number of put options to call options traded. More puts traded mean investors expect prices to fall (bearish). More calls traded mean investors expect prices to rise (bullish).
PCR is also considered as a contrarian indicator which helps traders not to get caught in the herd mood of the market. Based on the extreme PCR ratio, the trader might take a call to buy or sell against the prevailing mood of the market
PCR is also considered as a contrarian indicator which helps traders not to get caught in the herd mood of the market. Based on the extreme PCR ratio, the trader might take a call to buy or sell against the prevailing mood of the market
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