Put-call ratio (PCR) is the total open interest in put options divided by the total open interest in call options for a given index or stock, at a given point in time.
PCR = Total Put OI ÷ Total Call OI
For Nifty or BankNifty, PCR is calculated across all strikes for the current expiry — or sometimes across all active expiries combined.
What PCR Measures
PCR measures crowd positioning. When significantly more put options are open than call options, the market is positioned for a fall — more traders have bought downside protection or are short the market via puts. When call OI dominates, the crowd is positioned for a rise.
PCR is a contrarian indicator. Extreme readings in either direction historically precede reversals, not continuations.
Reading Extremes
High PCR (above 1.2–1.5): The market is heavily positioned for a fall. At extreme readings, so many traders are already short or hedged that there may not be enough new sellers to push the market lower. A contrarian interpretation is that the market may be closer to a short-term bottom.
Low PCR (below 0.7): The market is positioned for a rise. Extreme bullishness with very little put protection historically precedes corrections — not because bears are right, but because the bullish positioning is already crowded.
Where to Find NSE PCR Data
NSE publishes option chain data in real-time on nseindia.com. The PCR for Nifty and BankNifty is calculated from the option chain and is also published directly on the NSE market data section.
Many broker platforms and market data sites display a live PCR with historical charts, making it easier to see current readings in the context of recent range.
Limitations
PCR does not tell you when a reversal will happen. A high PCR reading might precede a bounce by hours, days, or weeks. In trending markets, PCR can remain elevated for extended periods without producing a reversal.
PCR includes hedges. Institutional participants use put options as portfolio insurance, not necessarily as directional bets. A high PCR partly reflects defensive hedging by large funds, not pure bearish speculation. This makes the indicator an imperfect read of market sentiment.
Volume PCR vs OI PCR. PCR calculated from volume (contracts traded today) and PCR from OI (total outstanding contracts) can diverge. Volume PCR is more sensitive to intraday sentiment. OI PCR is slower and reflects a broader positioning picture.
PCR as One Signal Among Several
PCR works best as a context indicator, not a standalone signal. A high PCR reading when price is at a known support level and RSI is oversold provides a more complete picture than any of those signals individually. A high PCR with price in a strong downtrend and breaking support is a different context entirely.
For educational purposes only. Profitma is not a SEBI-registered investment adviser or research analyst. Nothing in this article constitutes investment advice.