What is the Cboe Equity Put/Call Ratio?

The Cboe Equity Put/Call Ratio compares the daily volume of equity put options (bets on declines / hedges) against equity call options (bets on rises). It’s a fast, contrarian-flavored sentiment gauge based on what investors are actually trading.

How it’s calculated

Each trading day, Cboe publishes the ratio:

Equity Put/Call Ratio = Total equity put volume ÷ Total equity call volume

Higher ratios mean traders are buying relatively more puts (more hedging or bearish bets); lower ratios mean call buying dominates.

Reverse semantics: higher = more fear

Unlike a typical fear/greed score where higher means greedier, with the put/call ratio higher values indicate more fear:

• ≤ 0.55: Call-heavy flow → complacency / greed.
• 0.55 – 0.70: Balanced / neutral.
• ≥ 0.70: Put-heavy flow → fear, hedging or capitulation.
• ≥ 0.90: Extreme fear; often clusters near short-term capitulation lows.

Setting alerts on raw values

Subscriptions on Fear & Greed Alert use the raw daily ratio. Because the semantics are reversed, the alert direction is also flipped:

• Set the fear (upper) threshold to 0.9 to be alerted on capitulation-grade put buying.
• Set the greed (lower) threshold to 0.55 to flag complacent / call-dominant tape.

Why it’s a contrarian-flavored signal

• Extreme put buying often happens after selloffs are well underway, not before — this is why high readings are sometimes treated as “the worst is being priced in.”
• Persistent low ratios can warn of complacency, but markets can stay complacent for a long time.
• Single-day prints are noisy; a 5- or 10-day average is often more useful than a single value.

Common pitfalls

• Equity vs. total: The equity ratio differs from the total (which includes index options used for hedging). Cboe’s equity ratio is the cleaner sentiment proxy.
• Volume ≠ conviction: Volume can spike around expirations or single-stock events.
• Not a precise timing tool: Use it as context alongside trend and volatility, not as a standalone trigger.

Sources

• Cboe Daily Market Statistics