The four signals
traders actually watch.
Every headline number — IV, SI, OI, P/C — is really a story about positioning. Play with each below to build a real feel for what they're saying.
Implied Volatility (IV)
The market's forecast of magnitude, priced into every option. Higher IV = wider expected range = more expensive options.
IV is the market's consensus forecast of future volatility, back-solved from option prices. It's not a prediction of direction — only of magnitude.
Short Interest & Days-to-Cover
How crowded is the bearish trade? SI% shows the size; days-to-cover shows how hard the exit is.
SI % = shorted / float. Days-to-cover = shorted / avg daily volume — how many days of buying would flatten every short.
High SI + high DTC + a rising price = classic squeeze cocktail. See the Squeeze Lab to simulate the cascade.
Volume vs Open Interest
Volume is today's activity. OI is what's still open. Together they tell you whether money is flowing in, out, or just rotating.
Volume = contracts traded today. Open Interest = contracts still open at day's end. Volume can dwarf OI on rotation days; OI reveals whether money is entering or leaving.
Put/Call Ratio
Options market sentiment in one number. Extremes are usually contrarian: peak fear precedes rallies, peak greed precedes drops.
P/C Ratio = put volume / call volume. Extremes are often contrarian: peak fear (very high P/C) tends to precede rallies; peak greed (very low P/C) tends to precede corrections.