Options Put/Call Ratio Sinks to 2022 Lows, Echoing Pre-Bear Market Warning

The Cboe equity put/call ratio’s five-day moving average dropped to 0.452 on May 29, its lowest since March 30, 2022, flashing a risk signal reminiscent of the last bear market’s onset. The ratio indicates call option demand is more than double put demand, reflecting euphoric sentiment driven by the artificial intelligence boom. The 21-day moving average slid to 0.493, the lowest since December 2021, when markets peaked before a sustained decline, according to Mark Arbeter, president of Arbeter Investments. While not an immediate sell signal, the persistently low ratio suggests risk appetite is approaching extreme levels, he said. Historically, similar lows preceded prolonged equity selloffs in both 2021 and 2022. Despite the warning, the S&P 500, Dow, and Nasdaq all notched record closes on June 1, with the information technology sector surging 2.5%. However, the Cboe’s VIXEQ index, tracking single-stock implied volatility, traded near a one-year high, widening the gap with the subdued VIX to a record, underscoring deepening internal market divergence.