The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “What is a low put to call ratio?” A put to call ratio basically tells you exactly what it sounds like it’s going to tell you. It tells you how much put volume there is relative to how much call option volume there is. And so, when you generally see a low put to call ratio, that means that there are fewer put options being purchased for every call option that’s purchased. Now, this is generally a gauge that market sentiment is seemed to be relatively bullish. People are almost excessively bullish in some cases because they’re not buying enough protection or they don’t feel like there’s a need to go out and buy put protection, so therefore, they decide that they don’t want to do it and they buy more call options and they have lower put option volume relative to call options. The inverse would be true when you see a put to call ratio that is really, really high. That means that