Advance-Decline Ratio

The advance-decline ratio (A/D ratio) compares how many stocks rose in a session with how many fell. It is one of the simplest measures of market breadth: it tells you whether a move in the Nifty is backed by most stocks or carried by a handful of heavyweights.

Advance-decline ratio = number of advancing stocks ÷ number of declining stocks

Stocks that closed unchanged are left out of the calculation. A reading above 1 means more stocks rose than fell, and a reading below 1 means more fell than rose.

How to calculate the advance-decline ratio

On 6 October 2026, 151 NSE F&O stocks advanced, 61 declined and 2 were unchanged (Stolo Market Pulse).

Advance-decline ratio = 151 ÷ 61 = 2.48

For every F&O stock that fell, roughly two and a half rose. The Nifty 50 gained 0.98% that day, and the ratio confirms the rally was broad rather than driven by a few large stocks.

The formula is the same whichever group of stocks you apply it to, but the result depends heavily on that group:

• Nifty 50: only 50 stocks, so the ratio swings sharply. 40 up and 10 down gives 4.0, and 45 up and 5 down gives 9.0.
• NSE F&O stocks: about 210 stocks, the group most relevant to derivatives traders and the one Stolo tracks.
• All NSE stocks: several thousand stocks, including small caps the Nifty barely reflects.

Only compare readings taken from the same group.

How to read the advance-decline ratio

These bands are rules of thumb, not fixed thresholds. The most useful comparison is with recent readings from the same group of stocks, and with what the index did on the same day.

Real example: a week of NSE F&O breadth

This is how the ratio moved over six trading sessions from 28 September to 6 October 2026 (2 October was a market holiday), using daily F&O breadth from Stolo Market Pulse.

Three things stand out:

• 28 September and 6 October: the index and breadth agree. A 1.56% fall with a ratio of 0.11 was a broad sell-off. A 0.98% rise with a ratio of 2.48 was a broad rally.
• 29 September: breadth was far weaker than the index. The Nifty slipped only 0.28%, but the ratio was 0.34: three out of four F&O stocks fell. Watching the index alone, you would have missed the selling underneath.
• 30 September: breadth was stronger than the index. The Nifty fell 0.42%, more than the day before, yet the ratio recovered to 1.04, with slightly more stocks up than down. The Nifty is weighted by market cap, so a few large stocks falling can pull it down even when most stocks rise.

The ratio also swung from 0.11 to 2.48 within six sessions. That is why many traders smooth the daily figure with a 5- or 10-day moving average before reading a trend into it.

Advance-decline ratio vs advance-decline line

• Advance-decline ratio: advances ÷ declines for a single session, or during the session. A snapshot of today’s participation.
• Net advances: advances minus declines. The same information as a difference rather than a ratio, and it still works when no stocks declined, where the ratio can’t be calculated.
• Advance-decline line: a running total of daily net advances. It shows whether participation is building or fading over weeks, and is the usual tool for spotting breadth divergence against the index.

How F&O traders use the advance-decline ratio

• Confirming a breakout. A Nifty breakout on a day when the ratio is well above 1 has broad support. The same breakout with a ratio below 1 is being carried by a few stocks and is easier to reverse.
• Spotting divergence early. If the Nifty keeps making highs while the ratio stays below 1 for several sessions, fewer stocks are joining the rally. Traders holding call options often tighten their stop-loss or cut position size at that point.
• Reading sectors. For a Bank Nifty trade, the breadth of banking stocks matters more than the whole market. Sector-wise breadth also shows sector rotation as money moves from one group to another.
• Context, not a trigger. Extreme readings, like 0.11 on 28 September, are sometimes read as short-term oversold signals, but most traders use the ratio to confirm or question a trade rather than to time entries.

Unlike the put-call ratio, which comes from options positioning, the A/D ratio is a pure cash-market statistic. It says nothing directly about open interest or implied volatility, so traders often read the two together.

Limitations of the advance-decline ratio

• Every stock counts equally. A small cap carries the same weight as the largest stock in the Nifty.
• The size of the move is ignored. A stock up 0.1% and a stock up 8% both count as one advance.
• It depends on the group of stocks. Ratios from the Nifty 50, F&O stocks and all NSE stocks can’t be compared with each other.
• It can’t be calculated when nothing declines. In a small group like the Nifty 50, use net advances instead.

Track live advances and declines, overall and sector-wise, for every NSE F&O stock with Stolo’s Advances & Declines tool, or check the daily breadth recap in Stolo Market Pulse.