Theres a lot of conflicting stand points on what and whether call/put ratio means anything. What are your thoughts on its validity in signaling strength? Is it basically as good as a bunch of consecutive green candles on a chart or does it indicate conviction?
Posted by Fit_Scheme_4368
2 Comments
It does indicate conviction. The real question is, does conviction translate to anything ever? I think you know the answer to that one..
Same as OI, I don’t think it can be used reliably all the time. However, it can signify overall consensus. I can say that I’ve seen lots and lots of times where there was a high P:C ratio going into earnings and the sentiment was dead wrong. If you see an extremely low P:C ratio (bullish sentiment) on a lot of volume and OI with no events coming up, it could indicate something, but it could still be a hedge or a gamble. Use scanners and paper trade on it.