PCR ratio

PCR - The PCR is Put call Ratio i.e The ratio of put  trading volume divided by the call trading volume. If the put call ratio is 0.90 it mean that for every 100 call bought, 90 put were bought.

FORMULA

PCR  =    TOTAL PUTS OI/TOTAL CALLS OI

Lets makes if simple buy the following example

If the total call open interest is 8,067,600 and the put open interest is 5,257,650 show in the pic which is given from the nseindia official website

lets divide the put open interest buy call open interest.

PCR =  5257650/ 8067600

        = 0.65

                                                                                                                                                                                     click to watch OI data                                                                                    

So the 0.65 is your PCR for the NIfty. It means that every 100 call bought where 65 put bought.

** PCR Ratio is used for analyzed the trend of market. How ? lets see

There are two possibility 

*If the PCR ( put call ratio) is below the 0.9, i.e that open interest of calls is more then the puts.

  Then we can say that market is Bearish.

*If the PCR is above the 1.3 then it assume the market is Bullish, it  shows the put bought are more then the call.