The Equity Put/Call Ratio graph shows you the ratio of puts to calls being traded.  This indicator is across stocks only, excluding both ETFs and indices, and simply divides the number of puts by calls.  The white line represents the put volume divided by the call volume.  The blue line represents the put open interest divided by the call open interest across all equities.

The first of two ways to think about this chart is to look for higher spikes for either the volume or open interest which represent bearishness.  Conversely, lower spikes represent net call buying, and therefore, more bullishness.

The second of two ways to think about this chart is to look at the relationship between the volume and the open interest for this put/call ratio.  If volumes are growing and open interest is not growing, that would be reflected on the chart by a larger gap between the blue line and white line, and thereby reflect higher speculation in either direction.

The Equity Put/Call Ratio Indicator is a valuable way to see how market participants are positioned, and with what level of speculation, so you can determine if you want to play a breakout or a reversal.

SpotGamma Subscribers can access the Equity Put/Call Ratio Chart here.