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Put/Call Ratio
Description
The Put/Call Ratio is a sentiment indicator that compares the number of traded put options to call options. It is used to gauge the overall mood of investors in the options market. The put-call ratio is determined by dividing the total number of traded put options by the total number of traded call options.
A higher put/call ratio indicates more put options being traded, which typically suggests bearish sentiment as investors are hedging against potential market declines. Conversely, a lower put/call ratio indicates more call options being traded, which generally suggests bullish sentiment as investors are expecting the market to rise. The Put/Call Ratio can be used as a contrarian indicator, where extreme values may signal an impending market reversal.

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