Gauging unusual trading activity

High put options volume relative to call volume is sometimes seen as a signal that something unusual—and potentially bearish—may be underfoot, in the market as a whole or in a particular stock.

The “unusual” part of that observation probably holds more water, simply because call volume typically outpaces put volume in most stocks on most days. The “bearish” part is much more suspect, since elevated put volume could be the result of traders exiting existing positions, bullish traders opening new short-put positions, or traders overreacting to a market surprise—or any combination of these factors.

Tuesday offered one example of market activity that may have initially appeared to be much more unusual than it really was. In the morning, medical diagnostics and device maker Danaher (DHS) appeared on the LiveAction scan for high put-call ratios, with put volume running more than 19 times call volume:

At first glance, this activity probably fit a generally bearish narrative, since the stock had opened the session down more than 5%—hitting its lowest level since October 1 and extending a pullback from its mid-January high to more than -16%. The early portion of this down move was highlighted by a sharp sell-off after the company’s January 29 earnings release, which beat its headline numbers but may have disappointed in terms of the company’s forward guidance:

Given these circumstances, Tuesday’s heavy put volume may have seemed anything but unusual.

But there were a few mitigating factors, some of which were apparent only later in the day. First, Tuesday’s decline followed news that DHR was acquiring another medical device market, Masimo (MASI). As is usually the case in such deals, the stock of the company being acquired jumped (MASI rallied more than 34%), while the acquirer’s shares pulled back, since they would have to reflect the cost of the purchase. In other words, the price action wasn’t “unusual,” it simply reflected a real-time adjustment to new financial facts on the ground.

Second, the majority of the put volume—more than 13,000 contracts—was in February monthly contracts expiring on Friday, with some appearing to be new positions and others looking like liquidations of existing ones. The one thing they had in common was that they didn’t have any implications beyond the next few days.

Finally, by mid-afternoon DHR’s put-call ratio had fallen below 6. Even traders who initially made the assumption that the morning’s much higher put-call ratio was bearish would at least have to consider the possibility that sentiment may have been less negative later in the day.

While none of this means the stock won't experience further downside, it does provide a reason to at least question the implications of a snapshot of market activity on its longer-term outlook.

Note: Morgan Stanley & Co. initiated coverage of Danaher (DHR) with an Overweight rating in December 2025.¹

Today’s numbers include (all times ET): mortgage applications (7 a.m.), Durable Goods Orders (8:30 a.m.), Housing Starts and Building Permits (8:30 a.m.), Industrial Production and Capacity Utilization (9:15 a.m.), FOMC Minutes 2 p.m.

Today’s earnings include: Analog Devices (ADI), First Majestic Silver (AG), Alibaba (BABA), Booking Holdings (BKNG), Copart (CPRT), Charles River Laboratories (CRL), Carvana (CVNA), DoorDash (DASH), Global Payments (GPN), Occidental Petroleum (OXY), Royal Gold (RGLD), SolarEdge Technologies (SEDG), Molson Coors (TAP), Verisk Analytics (VRSK).

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¹ MorganStanley.com. Risk Reward—Danaher Corporation. 2/17/26.