So is the open interest ratio of puts to calls any kind of a survey then of where people are willing to bet th

Question

e price of a stock will go?

Answer 1

Some people will tell you that put/calls are important sentiment indicators, but I think if you are going to try to do that then that ratio should be part of the whole assessment... don't zero in too much on it and miss more important things.

Answer 2

No. Even though you can find entire chapters of books devoted to put/call ratios, for professional option traders there is essentially no difference between a put and a call.

For example, the following two positions have identical risks and potential rewards:

(a) buy 20 puts with a strike price of $30
(b) buy 20 calls with a strike price of $30 and short 2,000 shares of the stock.

Answer 3

Not really. There is typically more open interest on the call side but for each one on either side there is a buyer and a seller who want different movements.