An increase in options volume can offer insight into trader sentiment and potential market opportunities. Traders look to buy Calls to speculate on price gains, and purchase Puts to speculate on price declines. But Put buying can also be associated with hedging and portfolio protection. The Put/Call ratio can be calculated by dividing the number of traded put options by the number of traded call options, and this ratio provides additional insight into how traders are thinking about the market.

When the Put/Call ratio rises, that is an indication of increasing bearish market sentiment. Changes in the Put/Call ratio can often forecast changes in the underlying market trend and are often an excellent early indication of price reversals. In this case, the Put/Call ratio can be used as a contrarian indicator. When there's a higher level of anxiety in the market, a decrease in the Put/Call ratio could be a hint of an upcoming bullish movement.

Join John Rowland, Barchart's Head of Trading Education, as he highlights Barchart’s Unusual Option Volume page. John will discuss how to decipher the data contained within, and what clues the Put/Call ratio provides. John will also show what other classical technical analyses he likes to apply when studying the Put/Call ratio, and how today’s elevated values compare to the peaks of yesteryear.

In the webinar, you will learn about:

Barchart's Unusual Options Volume page
What is the Put/Call ratio and its many implications
The contrarian nature of the Put/Call ratio
Identifying trading opportunities by applying the Put/Call ratio to equities as well as broader market indices

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