What is Put Call Ratio & How to Use it for Options Trading?

In trading, there are various indicators you can use to gauge the market sentiment and the likely trend that helps the traders make the right decision for trading. And trading in options you need to be very cautious to get the right indication of the market to enter into the right trading strategy.

As much as the trading activities in call and put increases or decreases, the option premium prices also get affected. Hence you can use the trading activities in the call and put to get an indication of the market or identify the trend in particular underlying security. However, to use this as an indicator in trading you have to understand the put-call ratio.