What is Long/Short Ratio?
The long/short ratio measures the proportion of traders, accounts, or notional value positioned long versus short on a perpetual futures contract. A ratio of 2.0 means twice as many longs as shorts. Sharpe tracks the global account long/short ratio from Binance, Bybit, and OKX alongside Binance's top-trader position ratio — separating retail crowd positioning from smart money. When top traders diverge from the retail crowd, it often signals an impending move in the direction of smart money.
How to use Long/Short Ratio
Use long/short ratio as a contrarian indicator at extremes. Retail crowd ratios above 3.0 historically mark local tops as euphoric positioning peaks; ratios below 0.5 mark local bottoms as capitulation concentrates shorts. The top-trader ratio is more predictive — when top traders flip bullish while retail remains bearish (or vice versa), align with top traders. Combine with funding rate and liquidations for a three-dimensional positioning read.