Insights
Put/Call Ratio
An indicator that reads market sentiment from the ratio of puts (bets on a fall) to calls (bets on a rise) in the options market.
BTC put/call ratio
The trend so far. The yellow dotted line is the BTC price.
How to read this chart
Below 1.0, calls (bets on a rise) dominate; above it, puts (bets on a fall) dominate. When sentiment leaned hard to one side, the price has sometimes moved the other way.
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New to this indicator?
What is the put/call ratio? It shows how much upside expectation (calls) and downside hedging (puts) have built up in the options market, as a ratio. Below 1 means calls dominate; above 1 means puts dominate.
What are puts and calls?
A call is the right to buy at a set price later; a put is the right to sell. People typically buy calls when they expect the price to rise, and puts when they expect a fall or want protection against one. That's why the ratio of the two contracts shows which way the market leans.
How do I read the number?
It's the put volume divided by the call volume, so 1 is the baseline. Below 1, calls dominate and upside expectations are strong; above 1, puts dominate and caution about a decline has grown. Note that puts are also bought like insurance, so a high reading isn't automatically bearish.
How should I use it?
Use it to check whether sentiment is heavily lopsided. Extremely low readings are often read as excessive optimism and extremely high ones as excessive fear — and when the skew was severe, the market has sometimes moved the opposite way. It's best read alongside the price trend.