What is the put call ratio?
The put call ratio (PCR) divides put option activity by call option activity for an underlying and expiry. The most common form uses open interest:
OI PCR = Total put open interest ÷ Total call open interest
A PCR of 1 means put and call open interest are equal. Above 1, put open interest is larger; below 1, call open interest is larger. On its own that says nothing about direction. It becomes useful when you watch how the ratio changes, and where it sits compared with the instrument's own recent range.
Four ways to read PCR
OI PCR
Outstanding positionsTotal put open interest divided by total call open interest for the selected expiry. It describes the stock of positions still open, so it moves slowly and is the most commonly quoted PCR.
Change-in-OI PCR
Today's activityCompares how much put open interest and call open interest were added or removed. It reacts faster than OI PCR and shows which side is currently seeing new positioning or unwinding.
Volume PCR
Traded contractsPut volume divided by call volume. Volume resets every session and includes intraday churn that leaves no open interest, so it is a measure of activity rather than commitment.
Intraday PCR trend
Direction of changeThe PCR plotted through the session. A rising line means put open interest is growing relative to call open interest, or call open interest is falling; a falling line means the reverse.
The live Nifty PCR page shows all three ratios side by side, so you can see when they agree and when they diverge. A rising OI PCR with a falling change-in-OI PCR, for example, suggests the outstanding put lead is intact but new activity has turned toward calls.
How to read the level
| Reading | What it means | What to check next |
|---|---|---|
| PCR above 1 | Put open interest exceeds call open interest. | Is it put writing (often read as support) or put buying for protection (caution)? |
| PCR near 1 | Put and call open interest are broadly balanced. | The intraday direction and strike-level changes matter more than the level. |
| PCR below 1 | Call open interest exceeds put open interest. | Is it call writing (often read as resistance) or call buying for upside exposure? |
There is no threshold that works everywhere. Different instruments have different typical ranges, so many traders compare today's value with the last few sessions rather than with a fixed number. The readings that stand out are the extremes: when the ratio is far above or below what that instrument usually shows, positioning is crowded on one side and the market can be vulnerable to a reversal or a squeeze.
Contrarian vs confirming. Some traders treat very high PCR as excessive pessimism (a contrarian bullish sign) and very low PCR as excessive optimism. Others treat a rising PCR as confirmation that put writers are defending a floor. Both readings are used; the strike-level open interest decides which fits the day.
The intraday trend often matters more than the level
A single PCR value is a snapshot. The intraday PCR trend shows whether the balance is shifting toward puts or calls during the session, which is closer to what is happening now. A steadily rising line means put open interest is growing relative to call open interest, call open interest is shrinking, or both. A falling line means the reverse.
Pair the trend with price. A rising PCR while the index rises can mean put writers are backing the move; a rising PCR while the index falls can mean protection is being bought. The same pattern has opposite meanings depending on the context, which is why the ratio should never be read alone.
How expiry changes the picture
As expiry approaches, open interest in strikes far from the money collapses as positions are closed and premium decays toward zero. The remaining open interest concentrates near the spot, so the ratio can shift even when nobody has changed their view. Compare readings from the same point in the expiry cycle, and prefer the active expiry over an all-expiry blend when you want to understand near-term positioning. Pair the reading with max pain on expiry day to see where the largest open interest concentration sits relative to spot.
Limitations and common misreads
- Open interest has two sides. Every contract has a buyer and a seller, so PCR cannot say who initiated the position or whether it is a hedge, a spread or a directional bet.
- Aggregates hide strikes. The same ratio can come from a few heavy strikes or a broad build. Check the strike-level chart before trusting the total.
- Hedges distort it. Institutions buy puts to protect portfolios, which lifts PCR without any bearish view on the market.
- Extremes can persist. A stretched ratio marks risk, not timing. It can stay extreme for a long time.
- Stocks are noisier. Thin open interest in single-stock options makes PCR jump around; treat stock readings with lower confidence.