Take the Nifty chain for the 30 Jun 2026 expiry. At the close of 10 Jun its put call ratio by open interest was 1.04. On 16 Jun, after the index had risen 3.3% in four sessions, it was 1.04. On 29 Jun, with the index 0.2% lower than on 16 Jun, it was 0.77. The ratio hardly moved when the index moved most, then fell hard while the index stood still. If it is a mood gauge, I would like to know which mood. This lesson sets out what the ratio is, how many ways there are to count it, and what dated evidence says. Every figure comes from NSE end of day files, so nothing here is live and nothing is a view on where the index goes next.
3By the end you can
- Compute a put call ratio from open interest and from volume, and say which you used.
- Explain why one market gives different ratios by expiry, by count and by strikes.
- Say what the evidence supports about threshold rules, and what it does not.
The idea, plainly
The put call ratio, PCR, is puts divided by calls. Count the put contracts, count the call contracts, divide. Above one there are more puts than calls. Below one there are more calls.
Three choices sit behind every put call ratio
- Count. Open interest is the stock of contracts still open. Volume is the flow traded in the session. They answer different questions, and for one expiry they can sit on opposite sides of one.
- Expiry. A weekly and a monthly of the same index carry different ratios, because different people use them.
- Strikes. All strikes, or only those near the index. Far strikes can hold large piles, and a window changes the answer.
Read 3 more paragraphs, 135 words
Here is the catch. Every put has a buyer and a writer, in equal number, and their results mirror each other, as the buyer and seller module shows. The writers are not bearish, and not every buyer is: some are hedging shares. The ratio counts how many put contracts exist against calls. It cannot count who stands on which side, so it cannot count mood.
Two readings circulate. One treats a high ratio as fear, since puts are bought as protection. The other treats a high ratio as support, since puts are written by people who expect the index to hold. Both are stories about who stands on which side, and a count cannot see that.
Before you quote a PCR, say which three choices sit behind it. The question page has the short version.
Worked example: one close, many ratios
On 10 Jun 2026 the index closed at 23,214.95. The school's files hold three Nifty expiries for that evening, and each gives two ratios.
One close, six put call ratios
The ratio sat still while the index rose, then fell while it stood still
| Chain date | PCR by open interest, nearest monthly | Nifty over the next five sessions |
|---|---|---|
| 1 Feb 2026 | 1.05 | 3.50% |
| 2 Feb 2026 | 1.07 | 3.10% |
| 10 Jun 2026 | 1.04 | 3.75% |
| 16 Jun 2026 | 1.04 | −0.69% |
| 29 Jun 2026 | 0.77 | 2.02% |
Read 8 more paragraphs, 396 words
Six numbers, from 0.79 to 1.13, for one close. The 30 Jun expiry reads 1.04 by open interest and 0.79 by volume: opposite sides of one. The 16 Jun weekly reads 0.82 and 0.96, the 28 Jul monthly 1.13 and 0.81. A rule that calls a ratio above one bullish and below one bearish would call the same expiry both on the same evening, depending on the count.
The close of 7 Apr 2025, after a sharp fall, said it harder. The weekly expiring two days later read 0.58 and the 24 Apr monthly read 1.05.
Now time. Here is the ratio of the 30 Jun chain on 10 Jun, 16 Jun and 29 Jun, set against the index.
Between 10 Jun and 16 Jun the index rose 3.3% and the ratio went from 1.04 to 1.04. Between 16 Jun and 29 Jun the index barely changed and the ratio fell to 0.77. In the last session before expiry call open interest piled up, as the open interest module shows. The ratio followed the pile of contracts, not the index. A ratio read on the last session before expiry is mostly about contracts that are about to disappear.
Does the ratio at least lead the index? Five chains in the school's files have a close five sessions later.
Five rows are a story, not a test, and the windows overlap in pairs. Four of the five windows rose whatever the ratio said. A real test needs a ratio for every session over several years, a stated horizon and a way to handle overlapping windows. The school's files do not hold that series yet, so I will not claim a result.
What do published tests say? A widely cited one used a US data set that tagged each option trade by who was buying, who was selling and whether the trade opened a position. A ratio built only from buyers opening new positions had information about stock returns over the next week. The tag is the signal. NSE's option chain and end of day files do not carry it, so the public ratio is a blunter number.
To check a ratio yourself, open the max pain checker in the next block. It prints the open interest of calls and of puts for the chain you pick, and the division is yours.
The common mistake
The claim: A put call ratio above 1 is bullish and below 0.7 is bearish.
Other sources read the same numbers the other way round, which is the first warning. The tests above give three more. On 7 Apr 2025 the same market read 0.58 on the weekly and 1.05 on the monthly, so the rule calls it bearish and bullish at once. Open interest and volume put one expiry on opposite sides of one. And the ratio moved most on the dates when the index did least. A ratio counts contracts, and a contract has a bull and a bear on it in equal number. Read it as a description of the book, never as a vote.
Key takeaways
- PCR is puts divided by calls. Say if it counts open interest or volume.
- Every put has a buyer and a writer. The ratio cannot tell bears from bulls.
- One close on 10 Jun 2026 gave six ratios, from 0.79 to 1.13.
- The ratio can sit still while the index moves, and fall while it stands still.
- The published signal used trade data that NSE's public files do not carry.
- Five dated chains test nothing. A threshold rule stays unproven.
The term this section turns on: Put call ratio
Before you trade. Derivatives trading carries a high risk of loss. SEBI's study "Profitability of Individual Traders in the Equity Derivatives Segment (FY25 to FY26)" (August 2026) found that 87.7% of individual traders in equity F&O made net losses in FY26, with aggregate net losses of Rs 91,685 crore. Read the SEBI study