Sentiment Index

A Sentiment Index measures values on a periodic basis for comparison purposes. Understanding what and how the measurements are taken will assist in understanding the value of an index.

The ForexTurtle Sentiment Index tracks the Option activity on over 30 currency instruments and combines the activity by currency pair. Since some of the instruments are priced in USD and some are per USD, we do not track Calls and Puts. This is because a Call on a USD/EUR instrument is the opposite of a Call on a EUR/USD instrument. To track Options sentiment across all of these instruments, we track Bullish and Bearish activity vs the USD. A Put Option on a USD/EUR instrument is an investor betting for a stronger Dollar. A Call Option on a EUR/USD instrument is an investor betting on a stronger Dollar. These two activities would be combined on our sentiment as Bullish activities.

Most Actives

The ForexTurtle Most Active report tracks over 35 currency options. The report lists the top five Calls and Puts by volume on any given day regardless of expiration date or strike price. It does not include the UUP or UDN ETF’s since they would dominate the report.

Bull/Bear Option Ratios

The ForexTurtle Options Ratio report is our unique daily Options trading ratio of Bullish Options activity/Bearish Options activity. Volume Ratio is the daily ratio of Bullish Volume/Bearish Volume. This is computed for the USD vs all currencies and also for USD vs some individual currencies that we have enough data to be relevant.

The buying and selling activity for bullish and bearish Options can be used to help gauge investor sentiment in the market.

Open Interest Ratio is the daily ratio of Bullish Open Interest Contracts/Bearish Open Interest Contracts. This is computed for the USD vs all currencies and also for USD vs some individual currencies that we have enough data to be relevant.

Open Interest is the amount of open contracts. A contract is open if it is has not expired, been exercised or closed. Open interest increases when a new contract is created. Open interest decreases when an existing contract expires, is closed, or is exercised. High bullish/bearish ratios are often indicative of optimism for the USD.