Traders Load Up on InsuranceSep 28, 2021
The put-call ratio measures the relative purchasing demand between puts and calls based on outstanding open interest. We’ve seen increased demand for puts as BTC continues to look weak, which is yet another sign there’s a lot of fear brewing within the market.
Oftentimes, the put-call ratio helps identify pivot points where traders are going ham on puts (buying insurance), and calls start to look cheaper — and thus have more attractive upside. We cannot be certain if we’ve hit that pivot level just yet, but the longer the demand for puts stays at this level, the sooner we hit it. Put buying seems to be concentrated in Oct. 8 expiring options, so there may be some relief for the market thereafter.