I’m not a big fan of deriving directional conclusions from the option market. Put-Call ratios and open interest figures are mainly a source of misinterpretation. However, something strange is going on in the option prices at the moment across Europe. The curve is extremely flat compared to historical prices. Out-of-the-money puts are cheap compared to out-of-the-money calls. Apparently there’s no demand for further downside protection. No matter what time horizon is used in analyzing the volatilities ; the otm calls are getting more expensive every day. A few conclusions can be made. We’re not expecting any downside shocks anymore, we’ve seen the bottom or we are looking forward to some upside gap openings.