The equity put call ratio popped up to 1.00 on Friday, from today's Barron's...........The Chicago Board Option Exchange's equity put-call ratio shot past 1.00 on Friday. This ratio is a contrarian sentiment indicator; if too many are bullish, the smart approach is to be bearish, and vice versa. The indicator is considered to be sending a bullish signal if it is between 0.75 and 1, neutral from 0.4 to 0.75, and bearish if it is below 0.40.
So why did the put-call ratio pop? Puts on tech stocks were the most actively traded during Friday's expiration. In Intel, "investors seemed like they did not want this stock put to them. They closed out their option positions, and they aren't that bullish," says Michael Schwartz, CIBC World Markets' chief option strategist.
Kyle Rosen, who runs the Rosen Capital Management hedge fund, says the ratio popped on heavy put buying. Until Friday, "people expected the trading range to continue, and most had been sellers of call options" to rake in premium. |
