Question 1

What is Long/Short Ratio?

Accepted Answer

The Long/Short Ratio shows the proportion of long positions versus short positions held by traders on a derivatives exchange. It provides insight into market sentiment by revealing how traders are positioned. Related indicators Long % and Short % show the individual percentages.

Question 2

How it works

Accepted Answer

``` LS_Ratio = Number of Long Accounts / Number of Short Accounts Long_Pct = (Long_Accounts / Total_Accounts) * 100 Short_Pct = (Short_Accounts / Total_Accounts) * 100 Long_Pct + Short_Pct = 100% ``` A ratio above 1.0 means more traders are long than short. A ratio below 1.0 means more traders are short. Note: this measures account count, not position size.

Question 3

Key features

Accepted Answer

- **Crowd sentiment indicator** — shows how the majority of traders are positioned - **Contrarian use** — when the crowd is overwhelmingly on one side, it often precedes a move in the opposite direction - **Range typically 0.5–2.0** — extreme readings outside this range are rare and significant - **Account-based** — measures number of accounts, not volume or notional value

Question 4

Contrarian signals

Accepted Answer

- **LS Ratio > 1.5 (Long % > 60%)** — crowd is heavily long, potential for a correction - **LS Ratio 60%)** — crowd is heavily short, potential for a squeeze - **LS Ratio near 1.0** — balanced market, wait for a clearer signal

Question 5

Divergence

Accepted Answer

- **Price rising + LS Ratio falling** — price going up but crowd is selling, a potential bullish sign (retail is fading the trend) - **Price falling + LS Ratio rising** — price going down but crowd is buying, a potential bearish sign (retail catching falling knife)

Question 6

Indicators

Accepted Answer

| Indicator | Description | |-----------|-------------| | `LS_Ratio` | Long/Short Ratio value | | `LongPct` | Percentage of long positions (0-100%) | | `ShortPct` | Percentage of short positions (0-100%) |

Question 7

Example conditions

Accepted Answer

| Condition | Meaning | |-----------|---------| | `LS_Ratio > 1.5` | Longs heavily dominate — contrarian short signal | | `LS_Ratio 65` | More than 65% of accounts are long | | `ShortPct > 60` | More than 60% of accounts are short | | `LS_Ratio cross_over 1.0` | Sentiment shifts from short-dominant to long-dominant |

Question 8

Tips

Accepted Answer

- The Long/Short Ratio is best used as a contrarian indicator — extreme crowd positioning often precedes reversals - Combine with funding rate for a complete sentiment picture: extreme LS Ratio + extreme funding rate = strongest contrarian signals - LS Ratio measures retail sentiment — institutional positioning may differ significantly - Data availability is limited to the most recent ~500 data points per timeframe on Bybit