Put writers underneath
Put-call open interest ratio above 0.8 in a stock above its 50-day. Put writers are paid to defend the strikes below.
A put-call ratio above 0.8 means put open interest rivals call open interest, and most of that put OI is written rather than bought. Sellers collecting premium now have a financial interest in the stock staying above their strikes. In an uptrend that behaves like a floor being defended. The same ratio in a downtrend is panic hedging, which reads very differently, and that is why the trend filter is not optional.
More derivatives:Long buildupShort buildupShort covering rallyLong unwindingOpen interest at a 3-month high
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