Skip to main content
Track Put-call ratio
24 / 31
Search the archiveLibrary
Library

2004issue C041-4

Dollar-weighted Put-call ratio construction

A standard Put-call ratio divides the day's put-contract volume by the day's call-contract volume and treats every contract as equal. A dollar-weighted rebuild uses premium times contracts so the ratio tracks money flow, and it can be accumulated minute by minute during the session.

  • A standard Put-call ratio is the day's put-contract volume divided by the day's call-contract volume and treats every contract as equal.
  • A dollar-weighted Put-call ratio is the sum of put premium times put contracts divided by the sum of call premium times call contracts.
  • The dollar-weighted ratio can be accumulated minute by minute so money flowing into puts versus calls can be observed during the session.
  • Editorial: weighting by premium rather than equal contract counts changes the regime reading, because the ratio then follows money flow instead of ticket count.
Entries in this reading1 entry
Current trackPut-call ratio33 readings

What the standard ratio counts

This archive article shows how to rebuild a Put-call ratio so it measures money flow instead of contract counts. The steps below stay with the historical construction. Any comment on regime signals is labelled as editorial.

A standard Put-call ratio is the day's put-contract volume divided by the day's call-contract volume. That form treats every contract as equal.

Build the dollar-weighted ratio

A dollar-weighted Put-call ratio is the sum of put premium times put contracts divided by the sum of call premium times call contracts. Premium and contract size both enter the totals, so the ratio compares money flowing into puts with money flowing into calls rather than a raw contract count.

Accumulate the ratio during the session

The dollar-weighted ratio can be accumulated minute by minute so money flowing into puts versus calls can be observed during the session. The same premium-times-contracts construction is reused; only the update frequency changes.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
24 of 31 in the Put-call ratio track
20061-1 pp.Next on Put-call ratioDebit put spreads inside put-call regimesA debit put spread is long the 450 put and short the 440 put for a 5.50 net debit, so the defined maximum profit is the 10-point strike gap minus that debit, or 4.50.
All readings on this track · 31 readings
  1. 1989Constructing an open-interest-scaled put-call ratio
  2. 1990Open-interest put/call ratio as an intermediate sentiment overlay
  3. 1990Activity-weighted call-put ratio for options regime context
  4. 1990Stacking moving averages, put-call regimes, and double bottoms
  5. 1991Constructing put-call open-interest regime filters
  6. 1991Constructing an activity-weighted call-put sentiment reading
  7. 1991Fund-index regime, put-call confirmation, then the tracking fund
  8. 1992A seven-vote sentiment score for fund-sleeve regimes
  9. 1992Construct an activity-weighted call-put ratio before reading crowd conviction
  10. 1992Pair action with opinion in a composite sentiment index
  11. 1992Crowd extremes as a three-gate contrary procedure
  12. 1993Constructing a put-volume average regime filter
  13. 1993Neural-net inputs and rule trees for mechanical systems
  14. 1994Failed Treasury put-call signal and a dollar regime shift
  15. 1994Separate survey, put-call, and premium ledgers before a regime call
  16. 1994Repeated option-premium prints and a four-zone regime map
  17. 1995Consecutive-day regimes in the put-call premium ratio
  18. 1995Construct a put-call ratio for regime-aware contrarian signals
  19. 1996Treat one options idea as a regime-aware portfolio decision
  20. 1997Options open interest, put-call sentiment, and contrarian context
  21. 2000A two-layer put-call construction for intermediate market conditions
  22. 2002Sentiment confirmation for trend-following options
  23. 2003Construct a regime overlay from implied volatility and the put-call ratio
  24. 2004Dollar-weighted Put-call ratio construction
  25. 2006Debit put spreads inside put-call regimes
  26. 2011Put-call ratio cycle phases for index context
  27. 2011Constructing a put-call ratio cycle indicator
  28. 2011Building a put-call ratio indicator stack
  29. 2011Put-call ratio regime context with oscillator and band confirmation
  30. 2018Reading seasonal regimes with put-call divergence and bands
  31. 2020Treat close-only volume as a hypothesis, then choose regime or phase
By fieldOptions and volatility171 readingsBy year2004107 readings
All 33 readings tagged Put-call ratio
Also on Put-call ratio5 readings
1989Constructing an open-interest-scaled put-call ratio1990Activity-weighted call-put ratio for options regime context1990Open-interest put/call ratio as an intermediate sentiment overlay1990Stacking moving averages, put-call regimes, and double bottoms1991Constructing an activity-weighted call-put sentiment reading