A contrarian's strategy concentrates on searching
In a market a put/call ratio is utilized in a contrarians fashion to identify and exploit these extreme values for profit. As we know, a contrarian's strategy concentrates on searching undervalued or overvalued stocks in a market. The trader always tries to confirm his level with reference to more than one type of data, and the put/call ratio options market extremes can assist such traders determine the opportunities in the market. The put/call ratio can be calculated by dividing the total amount of puts by the amount of calls and on this formula, we get a value that mirrors the basis of the market. For instance if there are 30000 put options on EUR/USD, and 60000 call options, the put/call ratio would be 0.5 implying a bullish market. More to read………..
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