Options put/call ratio

The volume of put options (gain if price falls) divided by the volume of call options (gain if price rises).

What it means

A high ratio shows many traders buying protection; a very low ratio shows heavy betting on a rise.

What to watch

Extreme readings, which often come near moments of strong fear or strong optimism.

How Compass-Alpha uses it

Background only; not used in any figure on Compass-Alpha.