Direct Answer
Put volume divided by call volume on options on the VIX index, as published by Cboe. VIX calls are usually bought as hedges against a sell-off, so the ratio is read differently from equity put/call ratios. A low ratio means heavy call buying, which usually reflects demand to hedge against market declines.
VIX Put/Call Ratio: Formula, Meaning, Signals, Examples and How to Use It
How Is VIX Put/Call Ratio Calculated?
Put volume divided by call volume on options on the VIX index, as published by Cboe. VIX calls are usually bought as hedges against a sell-off, so the ratio is read differently from equity put/call ratios.
Formula: VIX put/call = VIX put volume / VIX call volume
Inputs:
- Daily put volume on VIX options
- Daily call volume on VIX options
Worked example. If 210,000 VIX put contracts and 480,000 VIX call contracts trade in a day, the ratio is 0.44. The inputs are illustrative numbers, not market data.
Reading it. A low ratio means heavy call buying, which usually reflects demand to hedge against market declines. A rising ratio means less hedging demand or more bets that volatility will fall. It is compared with its own history.
Limits. Volume is dominated by a few large institutional trades and spreads, so single days can be noisy. VIX options are cash settled against the special opening quotation, not the spot index.
What is VIX Put/Call Ratio?
Put volume divided by call volume on options on the VIX index, as published by Cboe. VIX calls are usually bought as hedges against a sell-off, so the ratio is read differently from equity put/call ratios.
How to use VIX Put/Call Ratio
A low ratio means heavy call buying, which usually reflects demand to hedge against market declines. A rising ratio means less hedging demand or more bets that volatility will fall. It is compared with its own history. A reading alone is never a buy or sell signal; it needs context from price structure, volume, volatility and the broader market regime.
Strengths
- VIX options give a separate view of how traders position in volatility itself, rather than in equities.
- A separate ratio for VIX options avoids mixing volatility hedges with equity put and call activity.
- Reproducible when the formula and data convention are fixed.
Weaknesses and limitations
- VIX options are priced off the futures of their own expiry, so volume across expiries refers to different underlying prices.
- Reading the ratio requires knowing whether positions were opened or closed, which daily volume does not reveal.
- Correlated indicators can create false confidence by repeating the same underlying information.
Editorial and risk note
This page is educational content, not individualized investment advice. It should not imply guaranteed prediction, accuracy or outperformance.
Frequently Asked Questions
Is VIX Put/Call Ratio a buy or sell signal?
No. A low ratio means heavy call buying, which usually reflects demand to hedge against market declines. Volume is dominated by a few large institutional trades and spreads, so single days can be noisy. A trade built on it still needs a trigger, an invalidation rule, a position size and realistic execution assumptions.
What is the best setting for VIX Put/Call Ratio?
VIX Put/Call Ratio is computed from daily put volume on VIX options; daily call volume on VIX options, so the choices that matter are the data convention and the window it is read over. Test those across instruments, regimes and out-of-sample periods instead of fitting one historical winner.
Can VIX Put/Call Ratio be used by itself?
Volume is dominated by a few large institutional trades and spreads, so single days can be noisy. VIX options are cash settled against the special opening quotation, not the spot index. For that reason it is read next to measures of direction, participation, valuation, liquidity and risk, not alone.
Does VIX Put/Call Ratio work on every timeframe?
The calculation (VIX put/call = VIX put volume / VIX call volume) can be run on any bar size, but behavior is not portable: a reading on a five-minute chart describes a very different market window from the same reading on a daily chart. Validate the exact timeframe before relying on it.
Why does VIX Put/Call Ratio give false signals?
VIX options are priced off the futures of their own expiry, so volume across expiries refers to different underlying prices. Reading the ratio requires knowing whether positions were opened or closed, which daily volume does not reveal. Lag, noise and regime changes add to this, because market participants react to new information after the reading is calculated.
How should VIX Put/Call Ratio be backtested?
Rebuild VIX Put/Call Ratio from daily put volume on VIX options using point-in-time data, write the rules before testing, include delisted securities where relevant, model realistic fills and costs, reserve a validation sample and compare with a simpler baseline.