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Two broad-based options indicators are signaling potential giddiness from speculators
Not to be outdone by the stock market’s run to new records, a number of options indicators have lately been exploring new milestones of their own. After its recent peak above 1.00, the Options Clearing Corporation (OCC) all-exchange, equity-only 10-day option volume put/call ratio has swung to yet another extreme — this time, on the low end of the spectrum. The ratio checked in at 0.73 on Nov. 15, hitting its lowest point since late September 2018.
At the same time, the OCC all-exchange, all-volume 10-day put/call volume ratio has also been plummeting. This metric matched its equity-only counterpart’s aforementioned low with a 0.757 nadir — and in fact, both of these put/call ratios have since remained below 0.80 for at least 10 consecutive days, an occurrence which last took place in November 2017.
Taken together, the sharp, simultaneous skid lower in these two put/call ratios point to a sudden shift away from puts and toward calls — and from a sentiment perspective, that’s signaling potential giddiness in the options market.