In one line
The put-call ratio is total put open interest divided by total call open interest — one number describing how the whole chain is weighted.
How it works
Above one there are more puts outstanding than calls; below one, the reverse. It is computed over the WHOLE chain rather than the strikes on screen, because a ratio taken over twenty-one visible rows is a different number from the one every other page shows, and a reader comparing them would think one of them was broken.
There is a volume version as well as an open-interest version, and they answer different questions: one is about positions that exist, the other about activity today.
A bare ratio is hard to place, so the desk prints a PERCENTILE beside it — how this reading ranks against the past year of readings on the same index. That is the same treatment implied volatility gets, and for the same reason: the level that counts as high on one index in one year is ordinary on another.
What it is not
The ratio is not a contrarian signal, or any signal. Three specific errors are worth naming. Comparing NIFTY's ratio with BANKNIFTY's treats two differently structured chains as one scale. Reading a ratio without its own history mistakes an ordinary reading for an extreme. And treating a high reading as a statement about what comes next is a claim the number does not support — this desk shows where the ratio sits and how unusual that is, and stops there.