What is Put-Call Ratio (PCR)?
The put-call ratio (PCR) is the total open interest of put options divided by the total open interest of call options for the same underlying and expiry. A PCR of 1.3 on NIFTY means there are 1.3 open put contracts for every open call contract.
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How is PCR calculated?
PCR (OI) = total put open interest ÷ total call open interest, summed across all strikes of one expiry. Some traders also use a volume PCR (put volume ÷ call volume) or a PCR of OI change for the day.
A strike-wise PCR divides the put OI of one strike by the call OI of the same strike, which shows where puts or calls dominate.
How do traders read PCR?
In Indian index options most open interest is created by option writers, so a PCR above 1 (more puts written) is commonly read as support below the market and a bullish tilt, and a PCR below 1 as resistance above and a bearish tilt.
Extreme values are often treated as contrarian: a very high PCR can mean the market is overbought and a very low PCR that it is oversold. PCR works best alongside price, OI change and support and resistance, not on its own.
How does AOC show PCR?
AOC shows the overall PCR in the spot price bar, which turns green above 1.2, red below 0.8 and blue in between. Every strike row also shows its own PCR of OI and PCR of OI change in the strike column.
