What is PCR in the option chain?

PCR (Put-Call Ratio) is total put open interest divided by total call open interest. It is a sentiment gauge: more puts relative to calls raises PCR; more calls lowers it.

Is high PCR bullish or bearish?

It depends on context. High PCR shows heavy put activity, which can be bearish positioning — but at extremes it is often read as contrarian-bullish (oversold). PCR should be read relative to the instrument's own recent range, not a fixed number.

What is the difference between OI PCR and volume PCR?

OI PCR uses open interest (standing positions) and is steadier; volume PCR uses the day's traded contracts and is more reactive to intraday sentiment shifts.

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Option Chain Basics

What is the
Put-Call Ratio?

PCR is one of the most quoted — and most misused — sentiment gauges in options. Here's what it really measures, the difference between OI and volume PCR, and how to read it without falling for the myths.

PCR, defined

The Put-Call Ratio (PCR) compares activity in puts versus calls. The most common version uses open interest:

PCR (OI) = Total Put Open Interest ÷ Total Call Open Interest.

If puts and calls carry equal OI, PCR = 1. More puts than calls pushes it above 1; more calls pushes it below 1. It's a quick read on how the option market is leaning.

OI PCR vs volume PCR

OI PCR — based on standing open interest. Steadier; reflects positioning that's being held.
Volume PCR — based on the day's traded contracts. More reactive; captures fresh intraday sentiment.

Both are useful. OI PCR tells you where the market is positioned; volume PCR tells you what it's doing right now.

What high and low PCR mean

This is where most people go wrong. PCR has two readings depending on context:

High PCR — lots of put activity. As positioning it looks bearish, but at extremes it's often read as contrarian-bullish (the market is over-hedged / oversold).
Low PCR — lots of call activity. Looks bullish, but at extremes can be contrarian-bearish (over-optimistic / overbought).

The key rule: PCR is relative, not absolute. A PCR of 1.3 might be high for one instrument and normal for another. Always read it against the instrument's own recent range.

How to use PCR well

Track PCR over time and watch for extremes relative to its own range, not a magic number.
Look for divergence — e.g. price making new highs while PCR climbs can warn of hedging beneath the rally.
Combine it with open interest, change in OI and price. PCR alone is never a trade trigger.

Common myths

"PCR > 1 = bearish, < 1 = bullish." Too simplistic — context and extremes matter more.
"There's an ideal PCR." There isn't; it varies by instrument and regime.
"PCR predicts direction." It gauges sentiment; it doesn't forecast price on its own.

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