One options market indicator that contrarians love to follow closely was giving off bullish vibrations Wednesday.

The

Chicago Board Options Exchange

put/call ratios were surging, expressing rising pessimism on the outlook for stocks. The overall options market equity followed suit. At noon EDT, the CBOE equity put/call ratio registered nearly 0.80, up sharply from Tuesday's closing level of 0.54. Meanwhile, the overall market put/call ratio -- which includes all five options exchanges -- stood at 0.71.

The put/call ratio is the measure of how many put options trade for each call option. A high put/call ratio for contrarians is bullish, because with so many puts trading, it indicates a degree of negativity in the general thinking of the market. Contrarian traders generally like to do the opposite of where the market overall is leaning. For example, they see increased put buying -- speculating on a drop in a stock or index -- as positive because it means the idea has been around long enough for a short-term cycle to be nearing an end.

When the put/call ratio gets relatively high -- illustrating broad investor concern -- it suggests that selling may be nearing exhaustion and the market may be ready to rally.

While the spike in the put/call ratio on both the CBOE and the overall market is notable, a cautionary note would be prudent. A lot of the rise can be attributed to massive put option volume on

Citigroup

(C) - Get Report

and

Boeing

(BA) - Get Report

at the CBOE.

Wednesday morning, 45,650 January 40 Citigroup puts traded. The puts were up 1/16 ($6.25) to 1/4 ($25). Citigroup's stock was down 89 cents to $52.63. The heavy put trading could be an investor selling the puts, betting that by expiration Citigroup will be trading above 40 and thus the options will expire worthless.

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As for Boeing, 22,802 January 40 puts traded. The Boeing puts were unchanged at 3/16. Shares of Boeing were down $2 to $64.06. The trade could be an investor selling the puts, wagering that by expiration, Boeing will be trading above 40 and the puts will expire worthless.

David Schultz, of

Summit Capital Holdings

, says that he's seen some volume showing up recently in oil service stock call options. The money manager pointed out that oil service stocks have been doing pretty well, and he's expecting that will continue. A call is the type of option that gives the purchaser the right but not the obligation to buy a security for a specified price at a certain time and is basically a bet that the stock will go up.

Schultz is long both calls and stock in

Smith International

(SII)

.

Volume in oil service stock options was light overall Wednesday. Smith International's stock was up 31 cents to $79.44.

In options trading on the

Philadelphia Stock Exchange Oil Service Index

, the heaviest volume was in the October 130 calls with 773 contracts changing hands. The calls were down 1/4 ($25) to 5 3/8 ($537.50). The OSX itself was off 0.49 to 128.21.

Crude oil futures prices were higher on the

New York Mercantile Exchange

late Wednesday morning, with the November contract up 25 cents to $31.75 a barrel. Oil service stock bulls are betting that oil prices will remain in the neighborhood of their current levels, helping to continue to bolster oil service companies' stocks.