A tool which measures market state in terms of the dollar-weighted volumes traded, i.e., whether it is oversold or overbought. Put another way, this tool relates the total put value (put volume × put market price) to the total call value (call volume × call market price). As such, if this ratio is greater than 2.00 over a specific trading period, then the market is defined as being oversold. If it is less than 0.50, then the market is defined as being overbought.

Any value in between is defined as being a neutral reading.