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From the astute people at Bespoke Investments, a read through on recent overall option market activity and what it might imply for the weeks ahead.

• Equity market investors have been displaying very high enthusiasm for calls relative to puts in the last few weeks.
•  The rolling 5 day average of the CBOE put/call ratio, which measures the daily volume of puts traded divided by the daily volume of calls traded for single-name equity securities is back close to levels last seen in 1999 right before the Nasdaq implosion of 2000-2001.

The put-call ratio has once again lurched lower and late last week was on pace for one of its lowest readings of the past couple of decades; the index ended up rising throughout the day, but the 5 day average remains in the bottom 1% of readings since 2001.

Readings in the bottom decile on the put-call ratio historically is a very good tactical
signal that equity markets are headed for a rough patch. The general signal here is that equities face short-term headwinds.