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To: Follies who wrote (7915)	2/8/2000 7:09:00 PM
From: yard_man	Respond to of 42523

if folks are buying lots of puts -- they certainly must be wrong -- it is an indicator of sentiment.

To: Follies who wrote (7915)	2/8/2000 7:26:00 PM
From: pater tenebrarum	Respond to of 42523

it's bad because it's very high for a big up day like today. it denotes pessimism or doubt about the rally, and that usually means the market's headed higher. the differentiation between index and individual equity options is based on the facrt that index puts are commonly used as hedging instruments. thus an equity p/c ratio of 1 is considered high, while an index ratio of 1 is considered low. equity p/c : 0,40 and less is bearish. 0,65 and more is bullish. index p/c: 1 and less is bearish. 1,30 and more is bullish. overall CBOE ratio: 0,45 and less is bearish. 0,60 and more is bullish. these are approximations, and must be looked at in the context of other sentiment indicators to be interpreted correctly. outstanding option open interest is also used in sentiment analysis...it can e.g. help in determining support/resistance zones. a comparison of sector p/c ratios with sector p/c ratios over the course of 52 weeks can help to ferret out strong or weak sectors. Bill Hueb compares total equity o.i. with total index o.i. high ratios are considered bearish, low ones bullish. this ratio has been at or near record highs for months btw.