What Is Gold Put Call Ratio In Commodity Trading?
In MCX option trading is getting traded from 17/10/2017 onwards. Now MCX has introduced gold option in commodity. There is lots of option strategy but put call ratio is the most important one. That is it will help to calculate whether call option or put option has been bought more by the traders in the market.
TOTAL PUT OPTION OPEN INTEREST (OI) CURRENTLY DIVIDE BY TOTAL CALL OPTION OPEN INTEREST (OI)
CURRENTLY = PUT CALL RATIO
EXAMPLE OF GOLD PUT CALL RATIO:
CURRENTLY (EOD ON 18/10/2017)MCX GOLD OPTION PUT CALL RATIO is 0.73. That is in MCXINDIA.COM-OPTIONS- OPTIONCHAIN-SELECT PRODUCT- SELECT EXPIRY-GOLD CURRENT
OPTION CHAIN there will be open interest. In that if we divide TOTAL PUT OPTION BY TOTAL CALL OPTION then we will get the put call ratio.
As on 18/10/2017 EOD GOLD TOTAL PUT OPTION OI 580 (LOT), GOLD CALL OPTION OI 788 (LOT) 580/788 = 0.73 (PUT RATIO OF GOLD).
HOW TO PREDICT DIRECTION MCX GOLD WITH PUT CALL RATIO:
If traders bought more quantity in call options then gold price will not go up likewise if traders bought more quantity in put options then gold price will not go down in coming days. This may change depending upon change in put call ratio. This strategy is not only for gold but for all trading products. This put call ratio will give success of about 65% to 75%. Always the market will move against what most of traders think and this put call ratio will help to calculate that.
For more details logon to https://www.mcxindia.com/market-data/option-chain