While most options traders are familiar with the leverage and flexibility that options offer, not everybody is aware of their value as predictive tools. By tracking the daily and weekly volume of puts and calls in the U.S. stock market, we can gauge the feelings of traders. While a volume of too many put buyers usually signals that a market bottom is nearby, too many call buyers typically indicates a market top is in the making.
The bear market of 2002, however, has changed the critical threshold values for this indicator. movinng The ratio may be calculated using the numbers optlons puts and calls or on a dollar-weighted basis. This is a change of 4.92% from the previous market day and 1.3% from one year ago. The TraderHQ.com Roundup is a Free Investing newsletter emailed to you on a regular basis. At that point, it might make sense to adjust your own long portfolio strategy by hedging your positions, reducing equity exposure, or moving to the sidelines, as the probability incr.