Put-Call Ratio
Put open interest divided by call open interest. Often read as a sentiment gauge, and frequently read backwards.
Also called: PCR · PCR OI · put call ratio nifty
What it means
PCR divides outstanding put contracts by outstanding call contracts. Above 1 means more puts than calls are open; below 1 the reverse. It can be computed on open interest or on volume, and the two give different numbers with different meanings.
The contrarian reading treats a very high PCR as excessive pessimism and therefore bullish. The direct reading treats it as bearish positioning. Both are in circulation, which should tell you how much weight the indicator can bear on its own.
The level matters far less than the level relative to this underlying's own recent range. A PCR of 1.1 may be high for one instrument and unremarkable for another.
How OptionLab Pro’s engine uses it
In the live engine
PCR is computed from per-strike open interest in the same pass as Max Pain and surfaced alongside it as chart context. Like Max Pain it does not vote in the three-engine confluence — a measure whose directional interpretation is genuinely disputed has no business carrying weight in a scoring model.
go/internal/optionchain/maxpain.go (ComputeMaxPainAndPCR)The common mistake
Where traders get this wrong
Using an absolute threshold such as "PCR above 1.3 is bullish" across different instruments and regimes. The distributions differ per underlying, so a fixed cut-off reads as a signal in one and as noise in another. Also: mixing OI-based and volume-based PCR in the same comparison.
Related terms
Educational and analytical content only. OptionLab Pro is not a SEBI-registered investment adviser or research analyst and does not give buy or sell recommendations. Derivatives trading carries a high risk of loss.