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Hi
The Put/Call Ratio measures the difference between the amount of
call options traded against put options
The lower the ratio the more calls that have been traded. The higher
the ratio the more puts.
The put/call ratio is sometimes used by contrarian traders. What
they look for is the Total Put/Call Ratio to be above 1.0 on two
consecutive days then they look to go long (Buy Calls) on their
favorite index.
If the Total Put/Call Ratio is below 0.5 - 0.4 they look to go short
(Buy Puts) on their favorite index.
The above example doesn't work all the time so good risk/reward and
money management must be applied.
You can find the Total Put/Call Ratio @ http://www.cboe.com/
Then click the Data tab, then CBOE Daily Market Statistics. You can
also get a Daily summary sent to you via the cboe web site on the
Put/Call Ratio.
Sparkie
--- In equismetastock@xxxxxxxxxxxxxxx, "chorlton_c_hardy"
<micro_dot_uk@xxx> wrote:
>
>
> Hello All,
>
> While recently reading some literature on Trading Strategies, I
came
> across an indicator known as the "Put/Call Ratio" (PCR), which
> apparently is also sometimes referred to as the "Put/Call Premium
> Ratio".
>
> Unfortunately, as there was no real information about it, I was
> wondering whether anyone on here has heard of it? If so, can you
> confirm how it works, whether it would be useful for trading
Stocks,
> and finally whether there is something which can be used in
Metastock.
>
> Any help much appreciated,
>
> Thanks in advance,
>
> Chorlton
>
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