Citigroup has recently done a 10-1 reverse split. This has reduced the volume on the stock by nearly 90% and the effect on options has likely been similar. I have written many times about how I was worried that Citigroup options were skewing the put/call ratios. Its possible that we will now get better readings out of the put/call ratios, but also that the range of readings will differ.
When Citigroup traded under $5 many times hundreds of thousands of Citigroup options would trade in a day and the trading was often biased to the call side. Those options were worth pennies so they did not represent large commitments, but this had a large effect on the entire put/call ratio. I have found the put/call ratios to be less useful after the financial crisis than I did before.
The reason I write this is because I was thinking about my earlier piece and the charts I posted along with them. On the ISE equity we are seeing more put buying than we did during the Japanese disaster and on the CBOE equity we are seeing nearly as much. But the panic back then was palpable. This is not the case now and I am wondering if the difference is the Citigroup options.
In the long run I believe the elimination of massive volume in Citigroup options will make the put/call ratios much more useful. In the short run the range that the put/call ratio trades in might change and using the put/call ratios will be a little trickier.