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Put/Call Ratio Surges To Highest Since May 2012
The various interpretations of put/call ratios are as diverse as the number of traders who view them. Typically they are used contrarian-wise, a high Put/Call ratio signals an over-cautious investor universe and thus is bullish (and vice versa) but in recent years that has been much less evident. Currently, the index-based put/call ratio is at 1.80 - the highest since May 2012, having been notably above 1 (i.e. more puts than calls) for most of the days since the Bullard lows.
Put/call ratio (rebased around 1 for clarity) is at its highest since May 2012...
Of course, there is one difference now... no QE (in the USA)
Chart: Bloomberg
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Isn't put/call somewhat of a contrarian indicator, even for index options?
The bottom in October had a high put/call also, both equity and index.
I totally forgot that there is no QE with the markets raging like an homone injected teenager. One wonders with awe at the size of this erection in the markets.
Is it possible that the put/call ratio is skewed due to synthetic stock positions?
"Place your bets, place your bets! Don't forget the 30-1 on double sixes!"
back doe lil joe...
whats the point of placing bets when the currency will be garbage? tangibles...
You will need something to use to wipe your butt (or burn to keep warm) when the SHTF.
For the same reason monopoly is still a popular board game.
now thats pretty funny. same thing that will make you laugh will make you cry
chech on CME under market regulators about this new impementet rule Block trades
I dont get it. Each time they ended QE the market would go down. Since this last completion of QE instead of the marke going down it keeps going up! Is this really an indication that QE never really eneded? Is is still going on in another fashion? Oh how I need a stiff drink.
About a week before QE ended, I posted a link to an explanation that the dollar, and hence the stockmarket, would go up because Japan was in the early stages of its own QE, while the investors in emerging and European economies would respond to the stronger dollar by moving money into USD assets.
I don't want to go through my past comments to dig up the precise link; but it can be found in MauldenEconomics.com "Things That make You Go Hmmm" section.
Tyler, is it possible that there's more liquidity --> better pricing in exiting a position via options contracts? If AAPL can flash crash with 6M shares in 1 minute, if I want out of the shares, why not buy puts? Might as well buy puts versus sell calls with volatility so low. Then you can sell your shares, maybe even aggressively/violently, and perhaps even profit on your exit if you had bought OTM puts in the first place.
It reminds me of the firm that put the $5M bet an October SPY spread that paid I think it was 10:1. If you have that kind of improbable investment on the table, you might do quite well by selling violently. I think the spread was 195/190 puts, but I can't recall exactly.
No....check the bid ask spreads on in the monies
I don't get your comment. Not that it wasn't a good comment, I just don't understand it. Anyway, I have since changed my hypothesis: This was a good year for some stock managers, then it all evaporated in a blink of an eye, then on the bounce, many said "this has been a good year for us, let's pay the premium to ensure (insure?) that we keep it that way." As we keep drifting up and vol gets cheaper, perhaps there's a war of people looking to buy puts to make sure that they beat their benchmarks as others are selling puts to try to catch up to their benchmarks.
Wonder why the #Dow has gone crazy? #VISA the biggest component by weight is up $65 a share since mid October LOL
"Buy or die." Right up there with publish or perish.
Now pardon me while I hit the publish button...
The "professionals" are selling puts to the semi-pros, who are hedging. The pros pay close attention to implied volatility and the probability of their contracts closing "out of the money". The semi-pros are looking at technical indicators.
If prices continue to rise, the puts expire worthless and the pros keep the expensive insurance premiums paid to them by the semi-pros. As the contract dates approach, the pros can buy back their open contracts for less money than the buyers paid for them. (This is the usual practice.)
Most pros open their contracts with an off-setting contract which automatically closes the position if prices move against them, and which limits their gain if the prices don't. For the pros, lots of small gains with small risk is preferable to the big gain vs.big risk tradeoff.
This makes put sellers profitable most of the time and put buyers losers most of the time, especially at near peaks like now. This is also true for calls, if the market is in a downtrend.
After holding above its 5-day average for more than a month, the market droped below it for just 2 days; but it is now trading above the average again. That's not enough to make the pros think that the uptrend is over.
I'm waiting for the Call to Put Banksters into stockades, while waiting for their hyper-close haircut and shave.
But not holding my breath.
hahaha still trying to justify not being long this market as it continues the vertical trajectory straight to the moon I see.
Do me a favor and pull up a bar chart of the SPX with a monthly bar scale.
look at how straight that fucking line is, there is zero indication of this market topping in the foreseeable future.
QE ended? Why, because the Fed said so just like they said they're raising rates any minute now, as long as minutes = years?
Anyone care to mention the fact that for every put purchased, there is one being written by someone else (who in this case would be bullish)?
This chart only reflects a period while the market has been in a bull run. Does the ratio tell us anything when the market hits an actual top and rolls over into a bear market? In other words, over a more representative time period including bull/bear, is a high put/call ratio always bullish?
This is getting tiring, when will this fucker crash. It is overvalued to the extreme. It is being propped up with QE cash, central bank buying and stock buybacks. Meanwhile the world economy is slipping further and further, how else can you explain this level of valuation if it wasn't for the "invisible hand" that has been guiding it with deceitful intent.