The advantage of a real-time $wPCR is that it enables one to view changes in investor sentiment as they occur. This is computed for the complete options chain, including long-term equity anticipation securities (LEAPS). Dollar-weighted put/call ratios calculate the total dollar value of premiums paid for all the put contracts divided by the total value of premiums paid for all the call contracts. Therefore, trending put/call ratios are reinforcing indicators of price direction. A change in market sentiment is often an early indication of a trend change for a particular stock or narrow-based sector. Market Rebellion was founded by Ron Ianieri, Jon Najarian, Pete Najarian and Dirk Mueller-Ingrand in 2016 with the goal of helping individual investors. These are the professional traders and institutions that use sophisticated options pricing and statistical models as a basis for their strategies as they take highly leveraged positions in certain stocks and indexes ahead of key macroeconomic or stock-specific event risks. Smart money generally refers to investors in the know. It also discusses in detail smart money and the herd mentality. This chapter begins with a discussion on investor psychology and the dollar-weighted put/call ratio.
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