What do you think of the recent historically high/remarkable put/call ratio? An excellent buy opportunity? Never before have such high readings been sustained for so long, not to mention the small move down that has accompanied it. Strange indeed.
Could be some low volume days coupled with aggressive put buying as funds purchase some "insurance", especially going into a weekend, or three-day weekend.
Analyzing pc ratio w/o analyzing the IV changes that transpired is kinda dangerous. Case in point.. Brazil comes in and sells a ton of sugar puts for next 2 weeks, Put OI goes up since they are opening trades hence ratio goes up, is that bearish..of course not. You can't discern that w/o analyzing IV for it changed from 50 down to 40 together with PC ratio which suggest hi prices instead of low .
Right but when looking at CBOE total put/call, should we care so much about IV? P/C here tends to be contrarian, btw, higher ratio would indicate the approach of a bottom. Could this be because of low vix then (using the reasoning that low VIX = low premium = cheap protection)? seems kind of weak considering the ratio has been floating between 1.1 and 1.2 for about a month, unheard of for CBOE p/c