While option prices are driven by fundamental analysis of market prices, expiration dates, and strike prices there’s definitely an element of technical analysis in identifying potential opportunities.  Case in point is one of my favorite gauges of trader sentiment – the put/call ratio.

An increase in put call ratio can indicate bearish (pessimistic) sentiment about the share price of the underlying stock while a decrease in put/call ratio can signal that options traders are becoming more optimistic or bullish about future price moves.

For those of you that put some stock in put-call ratio, Business Insider recently published an article that identifies 10 large cap stocks that have seen significant decreases in puts vs calls over the last ten trading days.  Only time will tell if more optimistic trader sentiment means that the share price for these stocks will trend higher but it can’t hurt to keep an eye on them in the meantime.