Long/short ratio metrics

Two different long/short ratios — read them both

Most perp exchanges publish a long/short ratio. It looks simple: a number above 1 means more longs than shorts, a number below 1 means more shorts than longs. But there's a catch. Almost every exchange publishes at least two versions, and they often disagree with each other. Reading them correctly is the difference between useful information and noise.

Version one is the trader count ratio, sometimes called the account ratio. It counts each trader as one vote. If 60 accounts are net long and 40 are net short, the ratio is 1.5. Version two is the position size ratio — it weights every account by the size of its position. So one whale with a $50 million long position counts more in this ratio than a hundred retail traders with $500 longs each. The two ratios measure different things.

Here's the most useful pattern. Compare the two ratios. When the account-count ratio is heavily skewed long but the notional ratio is closer to balanced, it usually means small traders are loading up on longs while the larger accounts aren't following. Historically, that kind of mismatch shows up near short-term tops. The same pattern in reverse — small accounts crowded short, big accounts more balanced — shows up near short-term bottoms.

A few cautions. Long/short ratios are not a buy or sell signal by themselves. They're a positioning read, like funding. They can stay extreme for a long time. And they can be inconsistent across exchanges — some venues just have more retail-heavy users, others have more institutional flow. Always pair the read with funding, open interest, and price action before drawing conclusions.

Recap: long/short ratios come in two flavors — account count and position size. They can diverge, and that divergence is often where the real information is. Use as a positioning read, never as a standalone trade trigger.