Sentiment Metrics
Sentiment metrics are quantitative measures used to gauge market sentiment and investor emotions towards specific assets or the market as a whole. Here are some of the most commonly used sentiment metrics in trading:
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Sentiment metrics are like a market’s mood ring, changing colors to reveal the collective emotions of investors and hint at future trends!
- Put-Call Ratio: The ratio of the trading volume of put options to call options.
- Short Interest Ratio: The number of shares sold short divided by the average daily trading volume.
- Bullish Percent Index: The percentage of stocks in an index that are currently in a bullish pattern.
- Fear and Greed Index: A measure of market sentiment that combines various indicators to gauge the level of fear or greed in the market.