Put-Call-Ratio
The put - call ratio (PCR ) is one in securities trading to the timing indicators for valuing securities.
It indicates the ratio of traded put options to call options.
If put options predominate, this indicates prevailing opinion is a negative market sentiment ( stock market sentiment ). The other hand, dominance calls, this indicates from this point of view in a positive market sentiment. In fact, often after high put- call ratios an increase in the rates observed. Therefore, the PCR is considered as a contrary indicator. It should be noted that under normal conditions is less than puts are in demand calls; a " balanced " PCR is therefore considered among traders even as signs of a slightly negative market sentiment.
The Put-/Call-Ratio is a widespread sentiment indicator. At the Chicago Board Options Exchange ( CBOE ), the number of traded puts the number of traded calls every half hour is compared and formed it into a ratio. In Germany you can see on the websites of the Frankfurt and Stuttgart stock exchanges, the PCRs.
There are two ways in which the PCR can be calculated by volume ( number of traded options ) or money supply. Typically, the PCR is calculated based on the volume. However, according to some analysts, the calculation is based on the amount of money more meaningful, since this assesses how much money is actually invested.