The Put/Call Ratio is a measure that compares the volume of put options to call options. Put options give the holder the right to sell an asset at a specified price, while call options provide the right to buy. This ratio helps gauge market sentiment.A high Put/Call Ratio suggests that more traders are buying puts, indicating bearish sentiment. This could mean they expect prices to fall or are looking to hedge against potential declines. Conversely, a low ratio implies more call buying, signifying bullish sentiment as traders anticipate price increases.Traders use this metric to assess overall market mood and to make informed decisions. A drastic shift in the ratio can signal potential price reversals or trends. It’s important to combine the Put/Call Ratio with other indicators for a clearer market picture. By understanding this relationship, traders can better navigate market fluctuations and refine their trading strategies.