Interpreting Put-Call Ratio Charts

By Lawrence G. McMillan

In a continuation of the irregular series, explaining our analytical techniques, we are going to discuss how we interpret put-call ratio charts.  This series began two issues ago with an article on naked put selling.  Future articles in this series will encompass other aspects of position selection: calendar spreads, volatility skew-based trades, ratio spreads, and so forth.

In order to adequately understand how to interpret a put-call ratio chart, a certain amount of background information will be useful, including not only how the data is gathered and computed, but also how one can utilize the computer programs that we have designed to help in interpreting these charts...

Read the entire "Interpreting Put-Call Ratio Charts " article (published 8/10/12) by subscribing toThe Option Strategist Newsletter.