Nifty Put Call Ratio: Intraday Nifty PCR

PUT/CALL RATIO – THE KEYS TO HIGH PROBABILITY TRADE:

As a trader, what would you give to be able to know what the rest of the market participants are doing at any given point in time. Here is this secret report card, the put/call ratio is as close to actually having this information as a trader is ever going to find.

The PC Ratio measures how many put options are bought versus call options. The formula is very simple to calculate – take the put options Open Interest (OI) and divide by the OI of calls. This data is easily available in Nifty options chain. In the above chart we have automated the same for you so you can get live view of what market is thinking.

How to combine PCR in your trade plan?

Here is how I use this indicator. For the sake of simplicity, lets assume that everyone in the market is bearish at a given time and because of this prevalent feeling everyone is entering shorts in stocks, indices and even buying puts. With all market participants bearish and now sitting on short positions, a very interesting thing takes place – there is nobody left to sell. With nobody left to sell, there is no selling pressure on the market, and they start to drift higher. This drifting eventually hits the first set of stop loss orders. Now all these market participants will be using some sort of stop loss. Some will use a very tight SL, others may use medium and remaining using wide stop loss.

The group of tight stops get hit first, which generates a buying pressure taking market higher. Then the medium and finally the wide SL until all the stops are taken out.

By the time all stops are taken out the market participants turn bullish and want to remain on the long side of the market. Once everyone has bought then  there is no one left to buy and the market starts to drift lower.

Here is my Golden Rule:

“If PCR ratio stays below the previous day closing PCR, then market is likely to be bearish and I look for short trade setups. If the PCR ratio stays above the previous day closing PCR then I search for long trade patterns only”

 

Nifty Put Call Ratio Live Chart:

See the correlation between ‘Nifty Put Call Ratio Live Chart’ and the Nifty Spot Price. This is very useful indicator for day-trading.

For intraday trading – live PCR trend can be extremely reliable indicator.

4 ways to interpret ‘Nifty Put Call Ratio Live Chart’ and Nifty Spot Correlation:

1) If the PCR (Put Call Ratio) is increasing during correction in the up trending market – this is very bullish indication. It means, the Put writers are aggressively writing at dips. Look for retracement percentage of last rise during correction while keeping an eye on this chart.

2) If the PCR is steadily rising during the day along with Nifty spot – also considered bullish

3) If PCR is declining while the Nifty spot is near resistance level – bearish indication. This implies that bulls are fearful of bears.

4) If PCR declines during correction in the down trending market – this is very bearish indication. It means, either call writers are aggressively writing at every rise or Put writers are closing there positions cutting losses. Look for retracement percentage of last fall during correction while keeping an eye on this chart.

{ 16 Responses }

  1. This is cool. Good to see this chart – allows the trader to analyze and see correlation between various indicators and Nifty Spot.
    Thanks.

  2. Here is my Golden Rule:

    “If PCR ratio stays above the previous day closing PCR, then market is likely to be bearish and I look for short trade setups. If the PCR ratio stays above the previous day closing PCR then I search for long trade patterns only”

    i think if pcr ration is below than ..it is BEARISH, while you have mentioned ABOVE IN BOTH THE CASE PL.CLARIFY

  3. Hello Pradeep,

    Could you please possibly upload an excel file with historic values of PCR maybe since Jan’15?
    The daily PCR chart on your portal has this data in the form of a chart since July 17th. Would be really useful to study this trend for the past few months.

    Thanks
    Nayan

  4. I took ceat fo 1 lot@ 1262 and as it dip took novput@1150@27rs to hedge pl guide some stretegy Wat to do

  5. For last one week or so I am not able to see any of the charts on this site. I have tried all browsers but all in vain.
    Earlier I was able to see your site in Firefox but now the charts have gone invisible rest of the page is visible.
    Kindly help. I dont know if anybody is facing the same problem.

    Thanking you,

    Sheetal

    • PCR = (sum of Open interest of Puts for all strikes)/(sum of Open interest of Calls for all strikes)

  6. ‘Nifty Put Call Ratio Intraday’ not update today, it is showing previous day’s(29.03.16) data, same as well as ‘Nifty Option Chain: Change in Open Interest’ data.

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