Put-call ratio (PCR): formula, meaning and a worked example

How the put-call ratio is calculated, the three versions you will see quoted, how it moves through a session, and why the same reading supports opposite stories.

By the EzyOptions Team · Updated 2026-10-12

What is the put-call ratio?

The put-call ratio (PCR) compares how many put contracts are open with how many call contracts are open, for one underlying and one expiry. The formula is PCR = total put open interest ÷ total call open interest. Above 1, more puts are open than calls; below 1, the reverse. It summarises a whole chain in one number, which is both why it is popular and why it hides so much. The chain guide explains open interest itself; this page is about the ratio built from it.

How to calculate PCR, step by step

Choose one underlying and one expiry. A weekly and a monthly contract are separate chains with separate PCRs.
Add up the open interest of every put strike.
Add up the open interest of every call strike.
Divide the put total by the call total.

An illustrative NIFTY chain with the index at 24,020, morning: open interest and volume in contracts
Strike	Call OI	Put OI	Call volume	Put volume
23,700	900	5,200	400	2,100
23,800	1,400	6,800	900	3,300
23,900	2,600	7,400	2,100	5,200
24,000	6,200	6,900	7,400	7,900
24,100	7,600	3,100	6,600	2,500
24,200	8,800	1,600	4,300	900
24,300	7,100	700	2,200	400
Total	34,600	31,700	23,900	22,300

Open interest PCR = 31,700 ÷ 34,600 = 0.92.

Three PCRs: open interest, volume, and near the money

Screens quote more than one ratio under the same name, so check which one you are reading.

Open interest PCR divides positions still open. It changes slowly and describes how the book is built.
Volume PCR divides contracts traded today. It reacts within minutes and describes the day's activity, including trades opened and closed within the hour. In the morning chain above it is 22,300 ÷ 23,900 = 0.93.
Near-the-money PCR uses only the strikes around the current price, here the 24,000 strike and two either side. Far strikes carry large, stale positions that rarely matter to the current expiry, and leaving them out often changes the reading. On the same chain it is 25,800 ÷ 26,600 = 0.97.

How PCR changes through a session

By the afternoon in this example, 6,000 puts have been opened at 23,900 and 3,000 at 23,800, below the market, while the calls are unchanged. Open interest PCR moves from 0.92 to 1.18.

That is the honest use of PCR: a change in the ratio says positioning changed, and the strike table says where. It does not say who opened those puts. If they were written by sellers collecting premium below the market, the move is usually read as support building. If they were bought as protection, the same move is read as fear. The chain records that contracts were opened, never which side started the trade.

What a PCR reading can and cannot tell you

One number, two readings
PCR	Read as positioning	Read as fear or greed
Rising, above 1	Put writing below the market: support	Put buying: protection being bought
Falling, below 1	Call writing above the market: a ceiling	Call buying: chasing upside
Very high or very low	One-sided book	Often read as a contrarian extreme

Commentary often names 0.7 and 1.3 as extremes. Those are habits of the trade, not levels the exchange or any model defines, and they shift with the expiry, the index and the time of day. Compare a PCR with its own recent range rather than with a fixed number, read it with the strike table beside it, and treat it as a description of the present rather than a forecast of the next move.

Put-call ratio: common questions

How is the put-call ratio calculated?

Add up the open interest of every put strike for one expiry, add up the open interest of every call strike, and divide the first total by the second. In the example on this page puts carry 31,700 contracts and calls 34,600, so PCR is 0.92.

What is a good PCR for NIFTY?

There is no good or bad PCR. Readings around 1 mean roughly balanced put and call open interest; commentary often treats 0.7 and 1.3 as extremes, but those are conventions, not thresholds. A PCR compared with its own recent range says more than any fixed level.

What is the difference between OI PCR and volume PCR?

Open interest PCR divides contracts still open, so it describes how positions are built and changes slowly. Volume PCR divides contracts traded today, so it reacts within minutes and includes trades that were opened and closed the same day.

Is a high put-call ratio bullish or bearish?

Either, which is the problem with reading it alone. A high PCR from put writing below the market is usually read as support; the same number from put buying is read as fear. Open interest cannot tell writers from buyers, so a PCR needs the strike table and the price action beside it.