The buying and selling activity for puts and calls can be used to help gauge investor sentiment in the market. The call put ratio measures the relationship between the numbers of calls being bought versus puts being bought. This indicator refers to all options being traded for the S&P 500. Low call put ratios are often indicative of excessive pessimism and thus of large amounts of money on being at the "sidelines." Conversely, high call put ratios indicate a point at which there is so much optimism that very little money is left to push the stock or index higher.
