USING OPTION RATIOS
To many traders and investors, the limited-risk aspect of the purchase of both call and put ratios is
appealing. Many market followers believe that when the major activity is concentrated in either calls
(bullish expectations) or puts (bearish expectations), extremes in crowd psychology will appear. An
overabundance of optimism usually accompanies a market top, while market bottoms are typified by a
preponderance of pessimism.