PUT-CALL RATIO (PCR):
It compares the number of put options to call options traded on the market. (From the Seller’s perspective)
High PCR (> 1) means the puts are more in number than calls ? Bullish
This means the option sellers are comfortable selling puts more than selling calls. This is a bullish sign. Having said that, an extremely high PCR, usually 1.3+ might mean an overbought stock and may result in a bearish reversal
Low PCR (< 0.5) means the puts are less in number than calls ? Bearish
This means the option sellers are comfortable selling calls more than selling puts. This is a bearish sign. Having said that, an extremely low PCR, usually around 0.3 might mean an oversold stock and may result in a bullish reversal.