The put/call ratio is computed as ____________, and higher values are considered ____________ signals.
A) the number of outstanding put options divided by outstanding call options; bullish or bearish
B) the number of outstanding put options divided by outstanding call options; bullish
C) the number of outstanding put options divided by outstanding call options; bearish
D) the number of outstanding call options divided by outstanding put options; bullish
E) the number of outstanding call options divided by outstanding put options; bearish

Question

Quizplus · Accepted Answer

The put/call ratio is calculated by dividing the number of outstanding put options by the number of outstanding call options. Higher values of this ratio are generally considered bearish signals, as they indicate more puts are being bought, suggesting that investors expect the market to decline.

The Put/call Ratio Is Computed as ____________, and Higher Values