We will discuss about Put call Ratio and India Vix in this article. We have tried to explain about Put call Ratio and India Vix in simple language. Before moving forward we suggest you to get some basic knowledge about options i.e. call options and put options. As call options are bought when the trader is expecting market will move up from the current level and Put options are bought when trader is expecting market will down from current level. There are some more aspects and terms also about options as Writing of options, At the money option, In the money option and out of the money option or deep out of the money option. The trader must have knowledge about options before understanding about Put Call ratio.
The short form of PUT CALL RATIO is “PCR” which is most common term the traders in day to day conversation. PCR is the can be defined as Sentimental indicator for derivative market in national stock exchange. Professional Analysists get idea or mood of market by analyzing the Put call ratio. We can say Put call ratio is measurement unit which measures the mood or sentiment of the national stock exchange. Put call ratio can be calculated for individual stocks as well as indices and derivative segment.
Put option gives right to sell an asset at a predetermined price and vice versa Call options gives right to buy an asset at predetermined price, this is most common explanation/definition of call and put option.
The most common analysis is when traders are buying more put options in comparison of Calls the trend of market is bearish , and when traders are buying more call options in comparison of Put options the trend of market is bullish. Get intraday nifty option tips and earn good profit on daily basis
The formula of calculating Put Call Ratio is divide the number of open interest in a Put Contract by the number of open interest in Call option having same strike price and expiry date. It shows how many put option are traded against call options having same strike price and expiry. Put call ratio gives indications whether market is oversold and is giving bearish signal but it can be turn around any time . A low put call ratio gives indication that traders are buying more call options than put options and traders are betting of bullish trend. If put call ratio is 1 it means that investors/traders are buying more or less same quantity of call options and put options and trend is neutral. The most of the analysists is of the opinion that if put call ratio is below 0.7 gives a signal of bullish sentiment and vice versa put call ratio above 1 gives the bearish signal.
Put call ratio is very useful for intraday traders. Because it is a good technical indicator. We can calculate or determine put call ratio in live market during trading session and a professional trader can judge or analyze the mood of the market easily and can change direction of his trades according to the mood and trend of the market.
vix is created by Chicago Board Options Exchange , the volatility index, is a real time market index that shows the market expectation of 30-days forward -looking volatility. India Vix is a volatility index which is calculated or determined keeping in view of prices of Nifty and other indices . India vix is calculated using the best bid and ask quotes of the out of the money near and mid month. We are providing daily bank nifty tips, bank nifty option tips. Trade with one of the best bank nifty option tips provider in India