The put-call ratio is the total open interest in puts divided by the total open interest in calls for the same expiry. A PCR of 1.2 means there are 1.2 open put contracts for every open call. That is the whole calculation. What it means is the interesting part, because the same number supports two readings that point in opposite directions.
Today's figure for NIFTY, BANKNIFTY, FINNIFTY, MIDCPNIFTY and NIFTY Next 50 is on Options Today. Every F&O stock carries its own on its page - RELIANCE, for example, or any company in the stock directory. Free, no account needed.
How we calculate it
We take the option chain for the expiry shown on the card, add up the open interest on every put strike, add up the open interest on every call strike, and divide the first by the second. Every strike counts, near the money or far from it.
Two things are worth noticing about that arithmetic.
It counts open contracts, not trades. Open interest is the number of positions still open at the end of the session. A strike that traded heavily and closed flat adds nothing. So PCR is a picture of positions people are holding, not of what they did today.
It cannot see who holds what. Every open contract has a buyer and a writer. A put in the open interest is somebody's protection and somebody else's obligation at the same time. The ratio counts the contract once and says nothing about which side is the one with conviction.
That second point is where the two readings come from.
The two readings, and why both are in circulation
The hedging reading: a high PCR is bearish. Puts are what you buy to protect a portfolio or to bet on a fall. Lots of open puts means lots of people protecting themselves or positioning for downside.
The writing reading: a high PCR is supportive. Most index option open interest is carried by writers, because selling options is where the professional money concentrates. A large pile of put open interest below the market means large players have sold puts there, collecting premium on the view that the index will stay above those strikes. On this reading, heavy put writing is a floor.
Neither reading is wrong. They describe different participants, and the ratio alone cannot tell you which group built the positions. That is the honest limit of the number.
The more useful question is not "is the PCR high" but "where is the put open interest sitting, and has it been building or unwinding". The open interest profile on Options Today shows exactly that: which strikes carry the largest put and call positions, and how they changed from the previous session.
Reading it without fooling yourself
Compare it with itself, not with a rule of thumb. A PCR that is high for NIFTY is not high for a single stock, where one large position can swing the ratio on its own. The same index's PCR a week ago is a far better benchmark than any fixed threshold.
Extremes are more informative than the middle. A ratio drifting between 0.9 and 1.1 says the market is balanced and not much else. A ratio at an unusual extreme for that underlying says positioning has become one-sided, and one-sided positioning is what unwinds sharply.
Read it beside max pain and the expected move. PCR says which side the open interest leans to. Max pain says where it is concentrated. The ATM straddle says how far the options market expects the index to travel before expiry. All three sit on the same card for a reason.
What is a good put-call ratio?
There is no good or bad value. Around 1 means puts and calls are roughly balanced. Well below 1 means calls dominate the open interest, well above 1 means puts do. Whether either is bullish or bearish depends on whether the positions were built by buyers or by writers, which the ratio cannot show.
Is PCR calculated on volume or open interest?
Both versions exist. Ours uses open interest, because it describes positions still held at the end of the session rather than activity that may have been opened and closed the same day. A volume-based PCR is noisier and answers a different question.
Why does the PCR on a stock jump around so much?
Stock option chains carry far less open interest than index chains, so a single large position moves the ratio a long way. Read a stock's PCR with more caution than NIFTY's, and never on its own.
How current is the figure on EdgeTest?
During market hours it is recalculated from the live option chain and marked as live. After the close it shows the last session and is labelled with that session's date. A cached figure is never shown under a live label.
What to do with it instead of trading it
A put-call ratio is a description of how positions are stacked, not a signal with a proven edge. PCR is not one of the conditions our backtester can test today, and we would rather say that than imply otherwise. What it can test is the strategy itself: sell or buy a structure on a fixed number of days before every expiry we hold, gated if you like on IV rank, India VIX or a chart signal on the index, with every charge deducted.
Options backtesting sits on the paid plan, and the depth behind it is Index options from 2016 for NIFTY and BANKNIFTY, 2021 for FINNIFTY, 2022 for MIDCPNIFTY and 2024 for NIFTY Next 50These are the dates each contract was LISTED, not gaps in our data. Ten years of options history cannot exist for an index whose options have existed for five. The free plan covers equity strategies: Unlimited backtests on the free plan. What Free limits is DATA - three years, the Nifty 50, no options - never the number of runs
And the caveat that travels with any options result we produce: Options rules are checked once a day on the settle price, except for minute testing on one index
EdgeTest is analysis only. It does not give investment advice, does not place orders, and is not registered with SEBI