Put call ratio is a ratio of total traded put option against call option for a given day. This is actually contrarian indicator for near term trend, on this indicator a reading above 1 will be a bullish signal on nifty future, while ratio below 1 is a bearish signal. Whenever trader has doubt about the trend he can just look at put call ratio and get a clear trading idea. I would like to look for open interest data for both call option as well as put option, here I will be confirmed about my trade. Look at support resistance level to get extra confirmation of trade. Once you have clear trend, either uptrend or downtrend, you can take position in nifty option according to trend. In case of uptrend but nifty call option or write nifty put option; when in down trend, write nifty call option and buy nifty put option.
