How is Max Pain Calculated?

Max Pain is calculated by determining the total dollar value of in-the-money options at each strike price. For each strike price: Calculate the difference between the current stock price and the strike price. Multiply this difference by the open interest (number of contracts) at that strike for both call and put options. Sum the values: Add together the dollar value for put options and call options at each strike price. Repeat for all strikes: Perform this calculation for every available strike price in the option chain. Identify the maximum: The strike price with the highest combined dollar value is the Max Pain price. This calculation helps identify the price level where option writers would face the maximum financial loss if the stock closes at that price on expiration day.

How Can Traders Use Max Pain in Their Strategy?

Traders can incorporate Max Pain analysis into their trading strategy in several ways: Expiration Day Trading: As option expiration approaches, traders can use Max Pain as a potential support or resistance level, as market makers may attempt to push the price toward this level. Option Selection: Understanding Max Pain helps traders choose strike prices that are less likely to be manipulated, potentially improving their option trade outcomes. Risk Management: If a stock is trading far from Max Pain before expiration, traders can anticipate potential price movement toward this level and adjust their positions accordingly. Market Sentiment Indicator: Comparing the current stock price to Max Pain can provide insights into market sentiment and potential price direction near expiration. Hedging Strategy: Option writers can use Max Pain to identify strike prices where they might face the least payout risk, helping them structure more efficient hedging strategies.

What Does Max Pain Indicate About Stock Price Movement?

Max Pain provides insights into potential stock price behavior, especially near option expiration: Price Magnet Effect: If the stock price is significantly above or below Max Pain before expiration, there may be a tendency for the price to move toward Max Pain as expiration approaches, as option writers hedge their positions. Support/Resistance Level: Max Pain can act as a psychological and technical support or resistance level, especially on expiration day, as it represents the price where maximum option value would be lost. Volatility Indicator: A large gap between current price and Max Pain may indicate higher potential volatility or price movement as expiration nears. Market Maker Activity: Significant open interest concentration around Max Pain suggests where market makers might have the most incentive to influence price movement through their hedging activities. Note: Max Pain is a theoretical concept and should be used in conjunction with other technical and fundamental analysis tools, as it does not guarantee price movement.

How Often Does Max Pain Change?

Max Pain is a dynamic value that changes continuously based on several factors: Open Interest Changes: As traders open and close option positions, the open interest at different strike prices changes, which directly affects the Max Pain calculation. Stock Price Movement: As the underlying stock price moves, different strike prices become in-the-money or out-of-the-money, altering the dollar value calculations. Time Decay: As expiration approaches, the time value of options decreases, but the intrinsic value calculations for Max Pain continue to evolve with price movements. New Option Contracts: When new strike prices are added or when significant new positions are opened, Max Pain may shift to reflect the new distribution of open interest. For accurate Max Pain analysis, traders should monitor it regularly, especially in the days leading up to expiration, as it can shift significantly as market conditions and option positions change.

What's the Difference Between Max Pain and Spot Price?

Max Pain and Spot Price are two distinct concepts that serve different purposes in options trading: Spot Price (Current Market Price): This is the current trading price of the underlying stock or index in the market. It represents the real-time value at which the asset can be bought or sold immediately. Max Pain Price: This is a calculated theoretical price level based on option open interest data. It represents the strike price where option writers would face minimum payout obligations, not necessarily where the stock is currently trading. The relationship between these two prices is crucial: when the spot price is far from Max Pain, traders may anticipate potential price movement toward Max Pain as expiration approaches. However, this is not guaranteed, and many other factors influence stock price movement.

Is Max Pain Always Accurate for Predicting Stock Price?

No, Max Pain is not always accurate and should not be used as the sole indicator for predicting stock price movement. Here's why: Market Forces: Strong fundamental news, earnings reports, or significant market events can override the Max Pain effect and drive prices in unexpected directions. Institutional Activity: Large institutional trades, algorithmic trading, and other market participants may have different objectives than minimizing option payouts. Limited Influence: While market makers may attempt to influence price toward Max Pain, their ability to do so is limited, especially in highly liquid stocks with strong directional momentum. Multiple Expirations: Stocks often have options expiring on different dates (weekly, monthly), which means multiple Max Pain levels may exist simultaneously, reducing the predictive power of any single level. Statistical Tool: Max Pain is best viewed as a statistical tool that provides context about option market dynamics rather than a guaranteed price target. Traders should use Max Pain as one of many tools in their analysis, combining it with technical analysis, fundamental analysis, and market sentiment indicators for more comprehensive decision-making.

When is Max Pain Most Relevant for Options Trading?

Max Pain becomes increasingly relevant as option expiration approaches: Last Trading Week: Max Pain analysis is most useful during the final week before expiration, when option writers are actively hedging and the "pinning effect" (price movement toward Max Pain) is most likely to occur. Expiration Day: On the day of expiration, Max Pain can serve as a key reference level, as market makers may attempt to keep the stock price near this level to minimize their payout obligations. High Open Interest: Max Pain is more reliable when there is significant open interest concentrated around specific strike prices, as this indicates where option writers have the most exposure. Low Volatility Periods: During periods of low market volatility, Max Pain may have a stronger influence, as there are fewer competing forces driving price movement. Monthly Expirations: Monthly option expirations (typically the third Friday) often show stronger Max Pain effects compared to weekly expirations, due to higher open interest and more significant market maker involvement. While Max Pain can be calculated at any time, its predictive value and practical application increase significantly as expiration approaches, making it particularly useful for short-term trading strategies focused on expiration week dynamics.

ADANIENT

Q: What is Max Pain in Options Trading?

Max Pain, also known as the max pain price, is the strike price at which the maximum number of option contracts (both puts and calls) would expire worthless, causing the largest financial losses for option holders at expiration. This price point represents the level where option writers would experience the least payout obligation. The max pain theory suggests that as expiration approaches, market makers and option writers may attempt to influence the stock price toward this level to minimize their payout obligations, making it a significant reference point for traders analyzing option expiration dynamics.

Adani Enterprises Limited

2278.9 -3.50 (-0.15%)

L: 2273 H: 2300

Max Pain - ADANIENT

15 Dec 2025 04:11 PM IST Market Closed

Expiry

Max Pain for ADANIENT is 2300

Historical data for ADANIENT-2300-CE

LTP (2300 CE)

44.85 -3.35

Open Interest

8089 383

Historical data for ADANIENT-2300-PE

LTP (2300 PE)

54.05 0.6

Open Interest

3542 1

Strike 1900.2 has a total call value of 0 versus a total put value of 276,604,940,580 Combined total value = 276,604,940,580

Strike 1920 has a total call value of 0 versus a total put value of 261,690,604,440 Combined total value = 261,690,604,440

Strike 1938.95 has a total call value of 0 versus a total put value of 247,416,530,205 Combined total value = 247,416,530,205

Strike 1940 has a total call value of 0 versus a total put value of 246,625,618,440 Combined total value = 246,625,618,440

Strike 1960 has a total call value of 0 versus a total put value of 231,584,116,440 Combined total value = 231,584,116,440

Strike 1977.75 has a total call value of 0 versus a total put value of 218,234,783,415 Combined total value = 218,234,783,415

Strike 1980 has a total call value of 0 versus a total put value of 216,549,566,940 Combined total value = 216,549,566,940

Strike 2000 has a total call value of 0 versus a total put value of 201,569,864,940 Combined total value = 201,569,864,940

Strike 2016.55 has a total call value of 0 versus a total put value of 189,657,941,205 Combined total value = 189,657,941,205

Strike 2020 has a total call value of 0 versus a total put value of 187,174,790,940 Combined total value = 187,174,790,940

Strike 2035.9 has a total call value of 0 versus a total put value of 175,778,855,490 Combined total value = 175,778,855,490

Strike 2040 has a total call value of 0 versus a total put value of 172,855,230,360 Combined total value = 172,855,230,360

Strike 2055.3 has a total call value of 0 versus a total put value of 161,949,372,000 Combined total value = 161,949,372,000

Strike 2060 has a total call value of 0 versus a total put value of 158,642,630,130 Combined total value = 158,642,630,130

Strike 2074.7 has a total call value of 0 versus a total put value of 148,348,415,640 Combined total value = 148,348,415,640

Strike 2080 has a total call value of 0 versus a total put value of 144,654,255,750 Combined total value = 144,654,255,750

Strike 2094.1 has a total call value of 0 versus a total put value of 134,951,875,140 Combined total value = 134,951,875,140

Strike 2100 has a total call value of 0 versus a total put value of 130,907,510,100 Combined total value = 130,907,510,100

Strike 2113.5 has a total call value of 74,669,850 versus a total put value of 122,247,058,950 Combined total value = 122,321,728,800

Strike 2120 has a total call value of 110,622,000 versus a total put value of 118,104,728,550 Combined total value = 118,215,350,550

Strike 2132.85 has a total call value of 181,696,635 versus a total put value of 110,151,913,665 Combined total value = 110,333,610,300

Strike 2140 has a total call value of 221,244,000 versus a total put value of 105,884,112,270 Combined total value = 106,105,356,270

Strike 2152.25 has a total call value of 306,412,125 versus a total put value of 98,667,533,145 Combined total value = 98,973,945,270

Strike 2160 has a total call value of 360,294,000 versus a total put value of 94,158,937,320 Combined total value = 94,519,231,320

Strike 2171.65 has a total call value of 469,369,455 versus a total put value of 87,461,776,380 Combined total value = 87,931,145,835

Strike 2180 has a total call value of 547,548,000 versus a total put value of 82,671,469,890 Combined total value = 83,219,017,890

Strike 2191.05 has a total call value of 707,344,260 versus a total put value of 76,513,509,315 Combined total value = 77,220,853,575

Strike 2200 has a total call value of 836,772,000 versus a total put value of 71,579,491,560 Combined total value = 72,416,263,560

Strike 2210.45 has a total call value of 1,405,084,800 versus a total put value of 66,558,318,810 Combined total value = 67,963,403,610

Strike 2220 has a total call value of 1,924,452,000 versus a total put value of 62,045,430,975 Combined total value = 63,969,882,975

Strike 2229.8 has a total call value of 2,608,219,560 versus a total put value of 57,595,491,075 Combined total value = 60,203,710,635

Strike 2240 has a total call value of 3,402,473,160 versus a total put value of 53,168,157,615 Combined total value = 56,570,630,775

Strike 2249.2 has a total call value of 4,318,991,880 versus a total put value of 49,421,631,495 Combined total value = 53,740,623,375

Strike 2260 has a total call value of 5,442,960,840 versus a total put value of 45,023,535,615 Combined total value = 50,466,496,455

Strike 2268.6 has a total call value of 7,110,745,080 versus a total put value of 41,802,766,815 Combined total value = 48,913,511,895

Strike 2280 has a total call value of 9,386,344,680 versus a total put value of 37,533,375,615 Combined total value = 46,919,720,295

Strike 2288 has a total call value of 11,227,737,480 versus a total put value of 34,726,172,415 Combined total value = 45,953,909,895

Strike 2300 has a total call value of 14,085,493,080 versus a total put value of 30,515,367,615 Combined total value = 44,600,860,695

Strike 2307.35 has a total call value of 17,673,001,620 versus a total put value of 28,740,691,005 Combined total value = 46,413,692,625

Strike 2320 has a total call value of 23,998,693,575 versus a total put value of 25,773,873,855 Combined total value = 49,772,567,430

Strike 2326.75 has a total call value of 27,579,509,175 versus a total put value of 24,274,845,330 Combined total value = 51,854,354,505

Strike 2340 has a total call value of 34,879,966,350 versus a total put value of 21,625,456,155 Combined total value = 56,505,422,505

Strike 2346.15 has a total call value of 38,539,850,415 versus a total put value of 20,504,819,760 Combined total value = 59,044,670,175

Strike 2360 has a total call value of 47,032,815,840 versus a total put value of 18,098,372,565 Combined total value = 65,131,188,405

Strike 2365.55 has a total call value of 50,680,514,490 versus a total put value of 17,230,950,855 Combined total value = 67,911,465,345

Strike 2380 has a total call value of 60,408,518,925 versus a total put value of 15,192,655,530 Combined total value = 75,601,174,455

Strike 2384.95 has a total call value of 63,874,938,090 versus a total put value of 14,525,312,865 Combined total value = 78,400,250,955

Strike 2400 has a total call value of 74,494,705,710 versus a total put value of 12,496,321,530 Combined total value = 86,991,027,240

Strike 2404.3 has a total call value of 78,277,514,610 versus a total put value of 12,109,138,350 Combined total value = 90,386,652,960

Strike 2420 has a total call value of 92,226,457,500 versus a total put value of 10,766,783,640 Combined total value = 102,993,241,140

Strike 2423.7 has a total call value of 95,577,355,470 versus a total put value of 10,450,432,530 Combined total value = 106,027,788,000

Strike 2440 has a total call value of 110,802,292,230 versus a total put value of 9,498,496,230 Combined total value = 120,300,788,460

Strike 2443.1 has a total call value of 113,787,970,740 versus a total put value of 9,317,453,130 Combined total value = 123,105,423,870

Strike 2460 has a total call value of 130,209,386,400 versus a total put value of 8,330,476,230 Combined total value = 138,539,862,630

Strike 2462.5 has a total call value of 132,703,402,650 versus a total put value of 8,184,473,730 Combined total value = 140,887,876,380

Strike 2480 has a total call value of 150,320,496,900 versus a total put value of 7,218,153,480 Combined total value = 157,538,650,380

Strike 2481.9 has a total call value of 152,247,065,550 versus a total put value of 7,113,238,710 Combined total value = 159,360,304,260

Strike 2500 has a total call value of 170,748,378,750 versus a total put value of 6,113,787,480 Combined total value = 176,862,166,230

Strike 2501.25 has a total call value of 172,193,069,625 versus a total put value of 6,080,917,605 Combined total value = 178,273,987,230

Strike 2520 has a total call value of 193,992,633,375 versus a total put value of 5,587,869,480 Combined total value = 199,580,502,855

Strike 2520.65 has a total call value of 194,752,027,140 versus a total put value of 5,570,777,145 Combined total value = 200,322,804,285

Strike 2540 has a total call value of 217,656,357,045 versus a total put value of 5,061,951,480 Combined total value = 222,718,308,525

Strike 2540.05 has a total call value of 217,716,114,555 versus a total put value of 5,060,636,685 Combined total value = 222,776,751,240

Strike 2559.45 has a total call value of 240,995,544,195 versus a total put value of 4,550,496,225 Combined total value = 245,546,040,420

Strike 2560 has a total call value of 241,655,528,025 versus a total put value of 4,536,169,440 Combined total value = 246,191,697,465

Strike 2578.85 has a total call value of 264,583,680,285 versus a total put value of 4,045,151,445 Combined total value = 268,628,831,730

Strike 2580 has a total call value of 265,982,480,025 versus a total put value of 4,015,550,790 Combined total value = 269,998,030,815

Strike 2598.2 has a total call value of 288,120,006,345 versus a total put value of 3,547,088,250 Combined total value = 291,667,094,595

Strike 2600 has a total call value of 290,318,275,605 versus a total put value of 3,500,756,790 Combined total value = 293,819,032,395

Strike 2617.6 has a total call value of 312,574,383,765 versus a total put value of 3,171,189,750 Combined total value = 315,745,573,515

Strike 2620 has a total call value of 315,646,684,245 versus a total put value of 3,136,408,710 Combined total value = 318,783,092,955

Strike 2637 has a total call value of 337,408,812,645 versus a total put value of 2,890,043,010 Combined total value = 340,298,855,655

Strike 2640 has a total call value of 341,249,188,245 versus a total put value of 2,846,566,710 Combined total value = 344,095,754,955

Strike 2656.4 has a total call value of 362,332,938,045 versus a total put value of 2,608,896,270 Combined total value = 364,941,834,315

Strike 2660 has a total call value of 366,961,078,245 versus a total put value of 2,556,724,710 Combined total value = 369,517,802,955

Strike 2675.8 has a total call value of 387,273,471,345 versus a total put value of 2,328,237,750 Combined total value = 389,601,709,095

Strike 2680 has a total call value of 392,672,968,245 versus a total put value of 2,267,500,710 Combined total value = 394,940,468,955

Strike 2695.15 has a total call value of 412,164,237,105 versus a total put value of 2,048,413,530 Combined total value = 414,212,650,635

Strike 2700 has a total call value of 418,404,016,245 versus a total put value of 1,978,276,710 Combined total value = 420,382,292,955

Strike 2714.55 has a total call value of 437,485,727,235 versus a total put value of 1,767,866,250 Combined total value = 439,253,593,485

Strike 2720 has a total call value of 444,706,933,635 versus a total put value of 1,689,052,710 Combined total value = 446,395,986,345

Strike 2733.95 has a total call value of 463,190,572,035 versus a total put value of 1,490,336,355 Combined total value = 464,680,908,390

Strike 2740 has a total call value of 471,206,773,635 versus a total put value of 1,404,715,545 Combined total value = 472,611,489,180

Strike 2753.35 has a total call value of 488,895,416,835 versus a total put value of 1,215,783,675 Combined total value = 490,111,200,510

Strike 2760 has a total call value of 497,706,613,635 versus a total put value of 1,122,288,000 Combined total value = 498,828,901,635

Strike 2780 has a total call value of 524,206,453,635 versus a total put value of 841,716,000 Combined total value = 525,048,169,635

Strike 2792.1 has a total call value of 540,238,856,835 versus a total put value of 671,969,940 Combined total value = 540,910,826,775

Strike 2800 has a total call value of 550,789,779,255 versus a total put value of 561,144,000 Combined total value = 551,350,923,255

Strike 2820 has a total call value of 577,614,687,255 versus a total put value of 280,572,000 Combined total value = 577,895,259,255

Strike 2840 has a total call value of 604,439,595,255 versus a total put value of 0 Combined total value = 604,439,595,255

Max-Pain Table for Stocks

Max-Pain Table Expiry

Note:- click on symbol to see more detailed view

Max Pain Table (Stocks)
Symbol	Symbol Ltp	Max Pain
360ONE	1144.7	1140
ABB	5285	5200
ABCAPITAL	351.8	350
ADANIENSOL	1016.45	990
ADANIENT	2278.9	2300
ADANIGREEN	1047.6	1040
ADANIPORTS	1512.6	1500
ALKEM	5624.5	5700
AMBER	6801.5	6800
AMBUJACEM	553.45	550
ANGELONE	2582.5	2600
APLAPOLLO	1739.1	1740
APOLLOHOSP	7086.5	7200
ASHOKLEY	166.82	160
ASIANPAINT	2780.2	2800
ASTRAL	1430.6	1440
AUBANK	979.05	960
AUROPHARMA	1186.3	1200
AXISBANK	1284.8	1280
BAJAJ-AUTO	8940	9000
BAJAJFINSV	2070.5	2060
BAJFINANCE	1012.7	1020
BANDHANBNK	151.79	150
BANKBARODA	285.1	290
BANKINDIA	141.77	142
BDL	1402.6	1440
BEL	390.75	400
BHARATFORG	1414.1	1400
BHARTIARTL	2069.7	2100
BHEL	282.6	282.5
BIOCON	390.65	390
BLUESTARCO	1806.2	1780
BOSCHLTD	36400	36500
BPCL	367	365
BRITANNIA	6038	5950
BSE	2648.9	2750
CAMS	755.2	770
CANBK	148.29	148
CDSL	1517.6	1560
CGPOWER	670.15	680
CHOLAFIN	1733.7	1700
CIPLA	1508	1520
COALINDIA	384.45	382.25
COFORGE	1870	1840
COLPAL	2164.4	2180
CONCOR	502.75	510
CROMPTON	253.05	265
CUMMINSIND	4539.9	4500
CYIENT	1158	1160
DABUR	497.2	505
DALBHARAT	2103.6	2040
DELHIVERY	407.25	415
DIVISLAB	6347.5	6400
DIXON	13737	13750
DLF	697.9	710
DMART	3825.6	3900
DRREDDY	1280.6	1270
EICHERMOT	7121.5	7150
ETERNAL	298.45	300
EXIDEIND	372.45	375
FEDERALBNK	265.25	260
FORTIS	869.8	890
GAIL	169.86	175
GLENMARK	1985.6	1940
GMRAIRPORT	104.88	102
GODREJCP	1166.1	1140
GODREJPROP	2067.8	2040
GRASIM	2821	2800
HAL	4321.6	4500
HAVELLS	1412.3	1420
HCLTECH	1684	1660
HDFCAMC	2607	2640
HDFCBANK	996.1	1000
HDFCLIFE	772.7	770
HEROMOTOCO	5959.5	6050
HFCL	66	68
HINDALCO	847.85	820
HINDPETRO	466.15	460
HINDUNILVR	2293.5	2300
HINDZINC	568.05	540
HUDCO	214.85	220
ICICIBANK	1365.2	1380
ICICIGI	1951.8	1960
ICICIPRULI	648.5	630
IDEA	11.35	11
IDFCFIRSTB	83.87	82
IEX	142.32	145
IIFL	575.2	570
INDHOTEL	731.15	730
INDIANB	783.85	810
INDIGO	4965.5	5000
INDUSINDBK	851.25	850
INDUSTOWER	409.45	410
INFY	1606.8	1600
INOXWIND	125.99	130
IOC	168.55	165
IRCTC	672.5	685
IREDA	135.46	140
IRFC	113.25	115
ITC	402.3	405
JINDALSTEL	1034	1030
JIOFIN	299.6	300
JSWENERGY	486.45	490
JSWSTEEL	1114.8	1140
JUBLFOOD	577.45	590
KALYANKJIL	480.1	480
KAYNES	4197.5	4400
KEI	4167.9	4100
KFINTECH	1049.5	1060
KOTAKBANK	2181.3	2160
KPITTECH	1207.4	1220
LAURUSLABS	1004.9	1000
LICHSGFIN	531.45	550
LICI	856.9	880
LODHA	1091	1100
LT	4092.3	4040
LTF	305.1	305
LTIM	6269.5	6200
LUPIN	2092.6	2080
M&M	3608	3650
MANAPPURAM	286.25	282.5
MANKIND	2141.2	2200
MARICO	737.65	730
MARUTI	16415	16300
MAXHEALTH	1085.4	1100
MAZDOCK	2447.8	2600
MCX	10186	10100
MFSL	1698.3	1700
MOTHERSON	120.31	116
MPHASIS	2897.9	2900
MUTHOOTFIN	3856.4	3800
NATIONALUM	278.7	270
NAUKRI	1361.6	1360
NBCC	115.39	114
NCC	161.7	167.5
NESTLEIND	1243.5	1240
NHPC	77.21	78
NMDC	78.55	77
NTPC	323.95	325
NUVAMA	7274	7200
NYKAA	251.6	257.5
OBEROIRLTY	1655.9	1640
OFSS	7967.5	8000
OIL	403.55	410
ONGC	235.35	240
PAGEIND	36740	37000
PATANJALI	529.75	540
PAYTM	1310.1	1300
PERSISTENT	6297.5	6300
PETRONET	268.55	275
PFC	341.2	360
PGEL	564.75	560
PHOENIXLTD	1789.4	1760
PIDILITIND	1479.4	1480
PIIND	3245.4	3350
PNB	118.74	120
PNBHOUSING	922.05	910
POLICYBZR	1926.4	1900
POLYCAB	7339.5	7300
POWERGRID	262.2	270
POWERINDIA	19535	19500
PPLPHARMA	171.7	177.5
PRESTIGE	1655.4	1660
RBLBANK	304.3	310
RECLTD	342.5	355
RELIANCE	1556.2	1540
RVNL	313.15	315
SAIL	132.31	132
SAMMAANCAP	148.68	155
SBICARD	870	880
SBILIFE	2034.9	2020
SBIN	967.25	965
SHREECEM	26625	26500
SHRIRAMFIN	855.35	850
SIEMENS	3157.8	3200
SOLARINDS	12196	12750
SONACOMS	486.9	495
SRF	3001	2950
SUNPHARMA	1797.1	1800
SUPREMEIND	3272	3400
SUZLON	53.14	54
SYNGENE	660.35	650
TATACONSUM	1157.4	1170
TATAELXSI	5048.5	5000
TATAMOTORS	0	320
TATAPOWER	381.65	390
TATASTEEL	172.87	170
TATATECH	657.3	670
TCS	3230.2	3200
TECHM	1575.4	1560
TIINDIA	2647.7	2700
TITAGARH	789.5	800
TITAN	3866.2	3840
TMPV	347.15	360
TORNTPHARM	3782.6	3750
TORNTPOWER	1292.7	1300
TRENT	4109	4200
TVSMOTOR	3639.3	3600
ULTRACEMCO	11728	11700
UNIONBANK	153.65	152.5
UNITDSPR	1442.4	1440
UNOMINDA	1239.4	1280
UPL	765.65	750
VBL	477.6	475
VEDL	549.4	530
VOLTAS	1388.9	1360
WIPRO	261.74	255
YESBANK	21.76	22
ZYDUSLIFE	921.6	930

Note:

Stock LTP > Max Pain	Bearish Trend
Stock LTP < Max Pain	Bullish Trend

Frequently Asked Questions

Max Pain, also known as the max pain price, is the strike price at which the maximum number of option contracts (both puts and calls) would expire worthless, causing the largest financial losses for option holders at expiration. This price point represents the level where option writers would experience the least payout obligation.

The max pain theory suggests that as expiration approaches, market makers and option writers may attempt to influence the stock price toward this level to minimize their payout obligations, making it a significant reference point for traders analyzing option expiration dynamics.

Max Pain is calculated by determining the total dollar value of in-the-money options at each strike price. Here's the step-by-step process:

For each strike price: Calculate the difference between the current stock price and the strike price.
Multiply by Open Interest: Multiply this difference by the open interest (number of contracts) at that strike for both call and put options.
Sum the values: Add together the dollar value for put options and call options at each strike price.
Repeat for all strikes: Perform this calculation for every available strike price in the option chain.
Identify the maximum: The strike price with the highest combined dollar value is the Max Pain price.

This calculation helps identify the price level where option writers would face the maximum financial loss if the stock closes at that price on expiration day.

Traders can incorporate Max Pain analysis into their trading strategy in several ways:

Expiration Day Trading: As option expiration approaches, traders can use Max Pain as a potential support or resistance level, as market makers may attempt to push the price toward this level.
Option Selection: Understanding Max Pain helps traders choose strike prices that are less likely to be manipulated, potentially improving their option trade outcomes.
Risk Management: If a stock is trading far from Max Pain before expiration, traders can anticipate potential price movement toward this level and adjust their positions accordingly.
Market Sentiment Indicator: Comparing the current stock price to Max Pain can provide insights into market sentiment and potential price direction near expiration.
Hedging Strategy: Option writers can use Max Pain to identify strike prices where they might face the least payout risk, helping them structure more efficient hedging strategies.

Max Pain provides insights into potential stock price behavior, especially near option expiration:

Price Magnet Effect: If the stock price is significantly above or below Max Pain before expiration, there may be a tendency for the price to move toward Max Pain as expiration approaches, as option writers hedge their positions.
Support/Resistance Level: Max Pain can act as a psychological and technical support or resistance level, especially on expiration day, as it represents the price where maximum option value would be lost.
Volatility Indicator: A large gap between current price and Max Pain may indicate higher potential volatility or price movement as expiration nears.
Market Maker Activity: Significant open interest concentration around Max Pain suggests where market makers might have the most incentive to influence price movement through their hedging activities.

Note: Max Pain is a theoretical concept and should be used in conjunction with other technical and fundamental analysis tools, as it does not guarantee price movement.

Max Pain is a dynamic value that changes continuously based on several factors:

Open Interest Changes: As traders open and close option positions, the open interest at different strike prices changes, which directly affects the Max Pain calculation.
Stock Price Movement: As the underlying stock price moves, different strike prices become in-the-money or out-of-the-money, altering the dollar value calculations.
Time Decay: As expiration approaches, the time value of options decreases, but the intrinsic value calculations for Max Pain continue to evolve with price movements.
New Option Contracts: When new strike prices are added or when significant new positions are opened, Max Pain may shift to reflect the new distribution of open interest.

For accurate Max Pain analysis, traders should monitor it regularly, especially in the days leading up to expiration, as it can shift significantly as market conditions and option positions change.

Max Pain and Spot Price are two distinct concepts that serve different purposes in options trading:

Spot Price (Current Market Price): This is the current trading price of the underlying stock or index in the market. It represents the real-time value at which the asset can be bought or sold immediately.
Max Pain Price: This is a calculated theoretical price level based on option open interest data. It represents the strike price where option writers would face minimum payout obligations, not necessarily where the stock is currently trading.

The relationship between these two prices is crucial: when the spot price is far from Max Pain, traders may anticipate potential price movement toward Max Pain as expiration approaches. However, this is not guaranteed, and many other factors influence stock price movement.

No, Max Pain is not always accurate and should not be used as the sole indicator for predicting stock price movement. Here's why:

Market Forces: Strong fundamental news, earnings reports, or significant market events can override the Max Pain effect and drive prices in unexpected directions.
Institutional Activity: Large institutional trades, algorithmic trading, and other market participants may have different objectives than minimizing option payouts.
Limited Influence: While market makers may attempt to influence price toward Max Pain, their ability to do so is limited, especially in highly liquid stocks with strong directional momentum.
Multiple Expirations: Stocks often have options expiring on different dates (weekly, monthly), which means multiple Max Pain levels may exist simultaneously, reducing the predictive power of any single level.
Statistical Tool: Max Pain is best viewed as a statistical tool that provides context about option market dynamics rather than a guaranteed price target.

Traders should use Max Pain as one of many tools in their analysis, combining it with technical analysis, fundamental analysis, and market sentiment indicators for more comprehensive decision-making.

Max Pain becomes increasingly relevant as option expiration approaches:

Last Trading Week: Max Pain analysis is most useful during the final week before expiration, when option writers are actively hedging and the "pinning effect" (price movement toward Max Pain) is most likely to occur.
Expiration Day: On the day of expiration, Max Pain can serve as a key reference level, as market makers may attempt to keep the stock price near this level to minimize their payout obligations.
High Open Interest: Max Pain is more reliable when there is significant open interest concentrated around specific strike prices, as this indicates where option writers have the most exposure.
Low Volatility Periods: During periods of low market volatility, Max Pain may have a stronger influence, as there are fewer competing forces driving price movement.
Monthly Expirations: Monthly option expirations (typically the third Friday) often show stronger Max Pain effects compared to weekly expirations, due to higher open interest and more significant market maker involvement.

While Max Pain can be calculated at any time, its predictive value and practical application increase significantly as expiration approaches, making it particularly useful for short-term trading strategies focused on expiration week dynamics.

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