I have been reading Bernie Schaeffer's "The Option Advisor," which has been a very interesting book One of the things that is talks about is using put/call ratios as an indicator of the market. What are your thoughts on using it?

Thanks,
Heath

Heath,

I think our posts must have crossed. I think the put/call ratio indicator is a good sentiment indicator. And since I'm big on trying to measure sentiment, I think it's a good one to follow. There are many theories as to how to use it. I'm sure that Bernie Shaeffer's way is as good as any.

Larry

Do you know of a site that will give me the put/call ratio for individual stocks? I am a member of the optionsxpress, but they only let me screen stocks that have extremely high or low levels, so I cannot search

Heath

Heath,

If I understand what you want, you want to be able to see the put/call ratio of any stock that you're interested in without having to compute it yourself. I don't know of any sites that do that. Usually, what you're looking for with put/call ratios are imbalances, so you're just trying to screen for extremes. I think what I would do is make a list of stocks in Excel that you follow and enter a formula so that Excel will automatically compute it for you.

Larry

Larry,

What I was doing was searching for stocks on the options screener and I found that Macromedia's stock was heading down while it still had a put/call ratio that was 0.06, so I wanted to know if this was a record low ratio since the stock made it's 52-week high But to know that I need to know what the ratio was then. I guess I need a history of the stock's put/call ratio? Also you said I could make one in excel... but where would I get the numbers to put in? Would I have to add up all of the open interest numbers for all of the contracts?

Heath

Heath,

I failed to notice your follow up question. I think it will be difficult to find historical put/call numbers for individual stocks. My point was that you may want to start now with a list of stocks that you follow.

Larry