Put-call ratio (PCR): what it is and how to read it
Updated 2026-10-24 · 5 min read
The put-call ratio, or PCR, is one of the most quoted numbers in Indian options trading. It gives a quick read on how options positions are leaning, but it is often misread. Here is what it measures and how to use it carefully.
The formula
The most common version uses open interest: PCR equals the total open interest in put options divided by the total open interest in call options, usually for the current expiry of an index such as Nifty or Bank Nifty. A volume-based PCR, using contracts traded in the day, is also used.
Example: if put open interest is 12 lakh contracts and call open interest is 10 lakh contracts, PCR is 12 ÷ 10 = 1.2.
What high and low PCR can mean
- PCR above 1 means there are more open puts than calls; below 1 means more calls than puts.
- Many Indian traders read a rising PCR as a sign that option sellers are writing puts, which they do when they expect the market to hold up.
- Others read PCR the opposite way, as a contrarian gauge: very high PCR can mean excessive fear, very low PCR can mean complacency.
- Traders often treat extremes, roughly below 0.7 or above 1.3, as stretched. These are rules of thumb, not fixed levels.
Why PCR is never enough on its own
- It does not show who holds the positions or why. Many puts are bought as insurance by investors who are not bearish at all.
- PCR swings around expiry as positions are closed and rolled over.
- It describes the index; a single stock's PCR can behave very differently.
- It works best alongside price action, open interest changes and volatility, such as India VIX.
PCR on TradeIntel AI
TradeIntel AI summarises options positioning for Nifty and Bank Nifty as put-heavy, balanced or call-heavy, in plain language and without strike-level calls, as part of its daily brief.