Oncolytics Biotech Inc. Message Board
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call put ratio
The ratio of outstanding calls to puts is over 6.5 and very bullish.
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Unfortunately, a put/call ratio is a contrarian indicator. The kind of ratio you have noted usually suggests the market is near a top as there are excessive bullish expectations which, of course, are already built into the stock. This is a tested theory although, to be honest, I am not sure if it holds for companies like ONCY with a small float and following. This indicator has been tested to be contrarian for large stocks and indices like OEX, QQQQ etc. Google "Forecasting Market Direction With Put/Call Ratios" if you want to learn more.
Sentiment: Strong Buy
- 2 Replies to barelytickn
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I suspect a large number of calls are owned by the folks doing all the shorting. It limits their risk. If the stock flies to $10.00 they call in their shares at $6.00 and cover.
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Thanks, that makes sense for the market as a whole. However, for an upcoming binary event on a single product biotech, I'm certain this is a bullish indicator.
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Unless the MM's are the sellers, in which case they might have to manipulate in order to get extra shares cheap (if they're also expecting a huge move up)... Oh wait, didn't that just happen? lol!
Sentiment: Strong Buy
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