In current trend, the traders are more cautious about their trading. They never want to initiate any kind of risk over the investments. This is the reason why they tend to utilize all the possible ways to ensure the safety aspects before starting their trading. One of the best options which are being followed by all the trading experts in current trend is the calculation of put and call ratio. Since this calculation will be more effective on analyzing the option market, they can consider it to be the best indicator in the trading market. To reveal the fact, the experts tend to use this tactics to determine the mood of the market.
s&p put call ratio
The traders must be aware of the fact that if the ratio is increasing or if the ratio is greater than 7, it indicates that the traders in current market are highly interested buying puts. In case if the ratio is below 7 it is an indication that the traders are showing interest towards the calls. The most important aspect that is to be noted is the traders should make use of this ratio or they must analyze this ratio at the very beginning of the market or before starting their trading of the day.
Calculation
As this calculation is more important, the traders should be aware of it at the best. Basically the s&p 500 put/call ratio is determined through s&p put option and s&p call option. In case if this ratio is higher, it indicates the market fear and in case if the ratio is low, the traders can remain confidence. Apart from these, the traders can make use of the best source for their trading in online. The traders who are new to the market can spend some time over the online discussion to gain better knowledge about safe trading tactics.
