Open interest is different from volume
Volume counts contracts traded over a period. Open interest counts contracts that remain open. An open contract has a buyer and a seller; it is counted once, not twice. Heavy volume does not necessarily mean a large increase in outstanding positions.
Calculate the ratio consistently
OI-based PCR = total put open interest ÷ total call open interest. If put OI is 6,00,000 and call OI is 5,00,000 for the same selected contract set, PCR is 1.20. A volume-based PCR uses traded volume instead. They answer different questions and should not be labelled interchangeably. If call OI is zero or missing, a normal finite ratio cannot be calculated.
Make like-for-like comparisons
Keep the underlying, expiry, strike range, units and timestamps consistent. A five-strike snapshot and an entire expiry can produce different PCR values without either being wrong. OI shown in contracts, units or lots also needs consistent scaling. In TradeLab, check the selected market and expiry before comparing the values.
Avoid turning a reading into a prediction
A ratio above one means put OI exceeds call OI within that selection. It does not reveal whether each position is a standalone directional trade, a hedge or part of a spread. Combine available price, volume, spread and timestamp information rather than treating a single PCR threshold as an instruction to buy or sell.
A simple practice exercise
Choose one available expiry in the paper workspace. Record the time, displayed PCR and the strikes being compared. Revisit the same selection later and describe what changed, without inventing a reason the data cannot establish. Use available snapshots for timeframe comparisons; missing observations should remain missing.
Common questions
Does rising OI mean the price will rise?+
No. Each open contract has both sides. OI alone does not determine price direction.
Why is my PCR different from another website?+
Check whether both use OI or volume, the same expiry and strike range, and matching data timestamps.
Further reading
References explain general concepts. They do not endorse TradeLab or its simulations.