Navigating the Open Interest of Options on 6/9

OI PCR can be used to determine market sentiment -- if it is greater than 1, it is considered bullish, and if it is lower than 1, it is considered bearish. And computed by total open interest of all the puts divided by total open interest of all the calls.

Its utility, however, goes beyond this simple interpretation. The OI PCR can be used to determine market sentiment. If the OI PCR is greater than 1, it is considered bullish, and if it is lower than 1, it is considered bearish. However, its utility goes beyond this simple interpretation. The indicator can detect the dangerous consensus we discussed earlier, which can lead to drastic price movements.

To provide context, when the OI PCR goes significantly above 1, it indicates a shift from a bullish sentiment to an extremely bullish sentiment. Similarly, if the OI PCR is close to 0, it suggests an extremely bearish mood.