| PCR rose during the correction in the uptrend market.<\/td> | Bullish <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<\/span>Why is PCR important?<\/strong><\/span><\/h2>\n\n\n\nPut call ratio is a contrarian factor that can help determine the market extremities. When the traders are bearish, contrarians are on the bullish side. The reverse also holds true. This means that the same ratio is interpreted differently by both parties involved in the stock exchange. <\/p>\n\n\n\n Typically, a 0.7 PCR is used as a compass in the market. This means that the market is bullish when the value drops below 0.7 and approaches a value of 0.5. In addition, when the value exceeds 0.7, the market is assumed to be bearish. In this sense, by analysing the PCR, investors can take positions in the markets and even formulate entry and exit points.<\/p>\n\n\n\n <\/span>Conclusion<\/strong><\/span><\/h2>\n\n\n\nTraders use various methods to gauge market trends, and the put call ratio is one of them. Depending on the ratio, you can gauge the market\u2019s direction. Understand how derivatives and the PCR function to better understand the market’s sentiment and take your futures and options decisions! <\/p>\n\n\n\n <\/span>FAQs<\/strong><\/span><\/h2>\n\n\n\n |