ADANIENT
Adani Enterprises LimitedMax Pain - ADANIENT
Strike 1900.2 has a total call value of 0 versus a total put value of 276,935,856,405 Combined total value = 276,935,856,405
Strike 1920 has a total call value of 0 versus a total put value of 262,044,157,605 Combined total value = 262,044,157,605
Strike 1938.95 has a total call value of 0 versus a total put value of 247,791,748,905 Combined total value = 247,791,748,905
Strike 1940 has a total call value of 0 versus a total put value of 247,002,037,605 Combined total value = 247,002,037,605
Strike 1960 has a total call value of 0 versus a total put value of 231,983,401,605 Combined total value = 231,983,401,605
Strike 1977.75 has a total call value of 0 versus a total put value of 218,654,362,155 Combined total value = 218,654,362,155
Strike 1980 has a total call value of 0 versus a total put value of 216,964,765,605 Combined total value = 216,964,765,605
Strike 2000 has a total call value of 0 versus a total put value of 201,946,129,605 Combined total value = 201,946,129,605
Strike 2016.55 has a total call value of 0 versus a total put value of 190,003,522,170 Combined total value = 190,003,522,170
Strike 2020 has a total call value of 0 versus a total put value of 187,513,975,605 Combined total value = 187,513,975,605
Strike 2035.9 has a total call value of 0 versus a total put value of 176,089,052,865 Combined total value = 176,089,052,865
Strike 2040 has a total call value of 0 versus a total put value of 173,157,953,025 Combined total value = 173,157,953,025
Strike 2055.3 has a total call value of 0 versus a total put value of 162,224,201,235 Combined total value = 162,224,201,235
Strike 2060 has a total call value of 0 versus a total put value of 158,909,181,255 Combined total value = 158,909,181,255
Strike 2074.7 has a total call value of 0 versus a total put value of 148,584,079,125 Combined total value = 148,584,079,125
Strike 2080 has a total call value of 0 versus a total put value of 144,878,782,875 Combined total value = 144,878,782,875
Strike 2094.1 has a total call value of 0 versus a total put value of 135,180,759,165 Combined total value = 135,180,759,165
Strike 2100 has a total call value of 0 versus a total put value of 131,139,128,775 Combined total value = 131,139,128,775
Strike 2113.5 has a total call value of 74,669,850 versus a total put value of 122,461,157,325 Combined total value = 122,535,827,175
Strike 2120 has a total call value of 110,622,000 versus a total put value of 118,310,391,225 Combined total value = 118,421,013,225
Strike 2132.85 has a total call value of 181,696,635 versus a total put value of 110,340,502,545 Combined total value = 110,522,199,180
Strike 2140 has a total call value of 221,244,000 versus a total put value of 106,062,980,010 Combined total value = 106,284,224,010
Strike 2152.25 has a total call value of 306,412,125 versus a total put value of 98,819,147,085 Combined total value = 99,125,559,210
Strike 2160 has a total call value of 360,294,000 versus a total put value of 94,295,464,335 Combined total value = 94,655,758,335
Strike 2171.65 has a total call value of 469,369,455 versus a total put value of 87,578,144,235 Combined total value = 88,047,513,690
Strike 2180 has a total call value of 547,548,000 versus a total put value of 82,773,904,935 Combined total value = 83,321,452,935
Strike 2191.05 has a total call value of 707,344,260 versus a total put value of 76,597,164,885 Combined total value = 77,304,509,145
Strike 2200 has a total call value of 836,772,000 versus a total put value of 71,650,425,600 Combined total value = 72,487,197,600
Strike 2210.45 has a total call value of 1,406,053,515 versus a total put value of 66,607,941,120 Combined total value = 68,013,994,635
Strike 2220 has a total call value of 1,926,306,000 versus a total put value of 62,076,167,205 Combined total value = 64,002,473,205
Strike 2229.8 has a total call value of 2,614,010,220 versus a total put value of 57,605,938,365 Combined total value = 60,219,948,585
Strike 2240 has a total call value of 3,412,361,160 versus a total put value of 53,158,433,385 Combined total value = 56,570,794,545
Strike 2249.2 has a total call value of 4,334,565,480 versus a total put value of 49,407,643,065 Combined total value = 53,742,208,545
Strike 2260 has a total call value of 5,465,208,840 versus a total put value of 45,004,541,385 Combined total value = 50,469,750,225
Strike 2268.6 has a total call value of 7,147,608,780 versus a total put value of 41,783,772,585 Combined total value = 48,931,381,365
Strike 2280 has a total call value of 9,443,639,460 versus a total put value of 37,514,381,385 Combined total value = 46,958,020,845
Strike 2288 has a total call value of 11,288,740,260 versus a total put value of 34,713,605,385 Combined total value = 46,002,345,645
Strike 2300 has a total call value of 14,154,653,460 versus a total put value of 30,512,441,385 Combined total value = 44,667,094,845
Strike 2307.35 has a total call value of 17,762,829,465 versus a total put value of 28,735,947,855 Combined total value = 46,498,777,320
Strike 2320 has a total call value of 24,124,482,840 versus a total put value of 25,768,348,935 Combined total value = 49,892,831,775
Strike 2326.75 has a total call value of 27,725,738,790 versus a total put value of 24,269,320,410 Combined total value = 51,995,059,200
Strike 2340 has a total call value of 35,066,319,615 versus a total put value of 21,620,340,660 Combined total value = 56,686,660,275
Strike 2346.15 has a total call value of 38,750,528,160 versus a total put value of 20,499,514,230 Combined total value = 59,250,042,390
Strike 2360 has a total call value of 47,302,124,790 versus a total put value of 18,092,639,070 Combined total value = 65,394,763,860
Strike 2365.55 has a total call value of 50,980,521,045 versus a total put value of 17,225,217,360 Combined total value = 68,205,738,405
Strike 2380 has a total call value of 60,789,789,390 versus a total put value of 15,186,475,530 Combined total value = 75,976,264,920
Strike 2384.95 has a total call value of 64,284,505,230 versus a total put value of 14,519,132,865 Combined total value = 78,803,638,095
Strike 2400 has a total call value of 74,989,841,130 versus a total put value of 12,490,141,530 Combined total value = 87,479,982,660
Strike 2404.3 has a total call value of 78,785,139,810 versus a total put value of 12,103,091,220 Combined total value = 90,888,231,030
Strike 2420 has a total call value of 92,779,684,920 versus a total put value of 10,761,221,640 Combined total value = 103,540,906,560
Strike 2423.7 has a total call value of 96,146,246,100 versus a total put value of 10,444,984,860 Combined total value = 106,591,230,960
Strike 2440 has a total call value of 111,441,696,660 versus a total put value of 9,493,552,230 Combined total value = 120,935,248,890
Strike 2443.1 has a total call value of 114,440,498,400 versus a total put value of 9,312,604,920 Combined total value = 123,753,103,320
Strike 2460 has a total call value of 130,933,979,040 versus a total put value of 8,326,150,230 Combined total value = 139,260,129,270
Strike 2462.5 has a total call value of 133,438,346,790 versus a total put value of 8,180,224,980 Combined total value = 141,618,571,770
Strike 2480 has a total call value of 151,126,279,290 versus a total put value of 7,214,445,480 Combined total value = 158,340,724,770
Strike 2481.9 has a total call value of 153,061,067,340 versus a total put value of 7,109,589,420 Combined total value = 160,170,656,760
Strike 2500 has a total call value of 171,644,596,170 versus a total put value of 6,110,697,480 Combined total value = 177,755,293,650
Strike 2501.25 has a total call value of 173,093,922,045 versus a total put value of 6,077,866,230 Combined total value = 179,171,788,275
Strike 2520 has a total call value of 194,964,748,920 versus a total put value of 5,585,397,480 Combined total value = 200,550,146,400
Strike 2520.65 has a total call value of 195,726,613,140 versus a total put value of 5,568,325,230 Combined total value = 201,294,938,370
Strike 2540 has a total call value of 218,705,084,505 versus a total put value of 5,060,097,480 Combined total value = 223,765,181,985
Strike 2540.05 has a total call value of 218,765,033,595 versus a total put value of 5,058,784,230 Combined total value = 223,823,817,825
Strike 2559.45 has a total call value of 242,118,796,275 versus a total put value of 4,549,243,230 Combined total value = 246,668,039,505
Strike 2560 has a total call value of 242,780,887,485 versus a total put value of 4,534,933,440 Combined total value = 247,315,820,925
Strike 2578.85 has a total call value of 265,782,430,335 versus a total put value of 4,044,497,910 Combined total value = 269,826,928,245
Strike 2580 has a total call value of 267,185,707,485 versus a total put value of 4,014,932,790 Combined total value = 271,200,640,275
Strike 2598.2 has a total call value of 289,394,093,685 versus a total put value of 3,547,032,630 Combined total value = 292,941,126,315
Strike 2600 has a total call value of 291,599,371,065 versus a total put value of 3,500,756,790 Combined total value = 295,100,127,855
Strike 2617.6 has a total call value of 313,920,740,025 versus a total put value of 3,171,189,750 Combined total value = 317,091,929,775
Strike 2620 has a total call value of 317,001,939,705 versus a total put value of 3,136,408,710 Combined total value = 320,138,348,415
Strike 2637 has a total call value of 338,827,104,105 versus a total put value of 2,890,043,010 Combined total value = 341,717,147,115
Strike 2640 has a total call value of 342,678,603,705 versus a total put value of 2,846,566,710 Combined total value = 345,525,170,415
Strike 2656.4 has a total call value of 363,823,164,705 versus a total put value of 2,608,896,270 Combined total value = 366,432,060,975
Strike 2660 has a total call value of 368,464,653,705 versus a total put value of 2,556,724,710 Combined total value = 371,021,378,415
Strike 2675.8 has a total call value of 388,835,633,205 versus a total put value of 2,328,237,750 Combined total value = 391,163,870,955
Strike 2680 has a total call value of 394,250,703,705 versus a total put value of 2,267,500,710 Combined total value = 396,518,204,415
Strike 2695.15 has a total call value of 413,798,148,765 versus a total put value of 2,048,413,530 Combined total value = 415,846,562,295
Strike 2700 has a total call value of 420,055,911,705 versus a total put value of 1,978,276,710 Combined total value = 422,034,188,415
Strike 2714.55 has a total call value of 439,194,721,260 versus a total put value of 1,767,866,250 Combined total value = 440,962,587,510
Strike 2720 has a total call value of 446,437,315,095 versus a total put value of 1,689,052,710 Combined total value = 448,126,367,805
Strike 2733.95 has a total call value of 464,975,697,480 versus a total put value of 1,490,336,355 Combined total value = 466,466,033,835
Strike 2740 has a total call value of 473,015,641,095 versus a total put value of 1,404,715,545 Combined total value = 474,420,356,640
Strike 2753.35 has a total call value of 490,756,673,700 versus a total put value of 1,215,783,675 Combined total value = 491,972,457,375
Strike 2760 has a total call value of 499,593,967,095 versus a total put value of 1,122,288,000 Combined total value = 500,716,255,095
Strike 2780 has a total call value of 526,172,293,095 versus a total put value of 841,716,000 Combined total value = 527,014,009,095
Strike 2792.1 has a total call value of 542,252,180,325 versus a total put value of 671,969,940 Combined total value = 542,924,150,265
Strike 2800 has a total call value of 552,834,104,715 versus a total put value of 561,144,000 Combined total value = 553,395,248,715
Strike 2820 has a total call value of 579,736,262,715 versus a total put value of 280,572,000 Combined total value = 580,016,834,715
Strike 2840 has a total call value of 606,638,420,715 versus a total put value of 0 Combined total value = 606,638,420,715
Max-Pain Table for Stocks
| Max Pain Table (Stocks) | ||
|---|---|---|
| Symbol | Symbol Ltp | Max Pain |
| 360ONE | 1136.9 | 1140 |
| ABB | 5283 | 5200 |
| ABCAPITAL | 353.05 | 350 |
| ADANIENSOL | 1015 | 990 |
| ADANIENT | 2282.3 | 2300 |
| ADANIGREEN | 1048.8 | 1040 |
| ADANIPORTS | 1514.2 | 1500 |
| ALKEM | 5616 | 5700 |
| AMBER | 6851 | 6800 |
| AMBUJACEM | 554.35 | 550 |
| ANGELONE | 2573.5 | 2600 |
| APLAPOLLO | 1734.8 | 1740 |
| APOLLOHOSP | 7082 | 7200 |
| ASHOKLEY | 166.9 | 160 |
| ASIANPAINT | 2780 | 2800 |
| ASTRAL | 1427.2 | 1440 |
| AUBANK | 981.2 | 960 |
| AUROPHARMA | 1189.3 | 1200 |
| AXISBANK | 1283.8 | 1280 |
| BAJAJ-AUTO | 8967.5 | 9000 |
| BAJAJFINSV | 2070.8 | 2060 |
| BAJFINANCE | 1012.1 | 1020 |
| BANDHANBNK | 150.33 | 150 |
| BANKBARODA | 285.5 | 290 |
| BANKINDIA | 141.81 | 142 |
| BDL | 1400.9 | 1440 |
| BEL | 390.2 | 400 |
| BHARATFORG | 1406.3 | 1400 |
| BHARTIARTL | 2078 | 2100 |
| BHEL | 282.6 | 282.5 |
| BIOCON | 385 | 390 |
| BLUESTARCO | 1808.4 | 1780 |
| BOSCHLTD | 36400 | 36500 |
| BPCL | 365.35 | 365 |
| BRITANNIA | 6052 | 5950 |
| BSE | 2658.8 | 2750 |
| CAMS | 756.7 | 770 |
| CANBK | 148.49 | 148 |
| CDSL | 1514.4 | 1560 |
| CGPOWER | 669 | 680 |
| CHOLAFIN | 1732.4 | 1700 |
| CIPLA | 1506.4 | 1520 |
| COALINDIA | 384.1 | 382.25 |
| COFORGE | 1860.9 | 1840 |
| COLPAL | 2166.1 | 2180 |
| CONCOR | 503.05 | 510 |
| CROMPTON | 253 | 265 |
| CUMMINSIND | 4545.2 | 4500 |
| CYIENT | 1154.6 | 1160 |
| DABUR | 496.75 | 500 |
| DALBHARAT | 2103 | 2040 |
| DELHIVERY | 408.35 | 415 |
| DIVISLAB | 6377 | 6400 |
| DIXON | 13742 | 13750 |
| DLF | 697.05 | 710 |
| DMART | 3824.7 | 3900 |
| DRREDDY | 1279.1 | 1270 |
| EICHERMOT | 7115 | 7150 |
| ETERNAL | 298.25 | 300 |
| EXIDEIND | 371.05 | 375 |
| FEDERALBNK | 265.5 | 260 |
| FORTIS | 867.85 | 880 |
| GAIL | 170 | 175 |
| GLENMARK | 1976 | 1940 |
| GMRAIRPORT | 104.97 | 102 |
| GODREJCP | 1161.2 | 1140 |
| GODREJPROP | 2074 | 2040 |
| GRASIM | 2827.9 | 2800 |
| HAL | 4329.5 | 4500 |
| HAVELLS | 1413.8 | 1420 |
| HCLTECH | 1684 | 1660 |
| HDFCAMC | 2612.3 | 2650 |
| HDFCBANK | 996.3 | 1000 |
| HDFCLIFE | 771.2 | 770 |
| HEROMOTOCO | 5957 | 6050 |
| HFCL | 66.4 | 68 |
| HINDALCO | 847.6 | 820 |
| HINDPETRO | 466.4 | 460 |
| HINDUNILVR | 2298.5 | 2300 |
| HINDZINC | 566.35 | 540 |
| HUDCO | 215.12 | 220 |
| ICICIBANK | 1366.8 | 1380 |
| ICICIGI | 1942.5 | 1960 |
| ICICIPRULI | 646.95 | 630 |
| IDEA | 11.44 | 11 |
| IDFCFIRSTB | 84.08 | 81 |
| IEX | 142.97 | 145 |
| IIFL | 577.6 | 560 |
| INDHOTEL | 733.55 | 730 |
| INDIANB | 784.2 | 800 |
| INDIGO | 4977 | 5000 |
| INDUSINDBK | 851 | 850 |
| INDUSTOWER | 409.15 | 410 |
| INFY | 1609 | 1600 |
| INOXWIND | 125.08 | 130 |
| IOC | 167.17 | 165 |
| IRCTC | 672.7 | 680 |
| IREDA | 135.45 | 140 |
| IRFC | 113.41 | 115 |
| ITC | 403.1 | 405 |
| JINDALSTEL | 1032.8 | 1020 |
| JIOFIN | 299.2 | 300 |
| JSWENERGY | 485.55 | 490 |
| JSWSTEEL | 1117.2 | 1140 |
| JUBLFOOD | 575.75 | 590 |
| KALYANKJIL | 480.2 | 480 |
| KAYNES | 4233 | 4400 |
| KEI | 4170.1 | 4100 |
| KFINTECH | 1048.5 | 1060 |
| KOTAKBANK | 2175.3 | 2160 |
| KPITTECH | 1213.3 | 1220 |
| LAURUSLABS | 1005.7 | 1000 |
| LICHSGFIN | 531 | 550 |
| LICI | 858.3 | 880 |
| LODHA | 1099.4 | 1100 |
| LT | 4079 | 4040 |
| LTF | 305.2 | 305 |
| LTIM | 6284 | 6200 |
| LUPIN | 2091.6 | 2080 |
| M&M | 3610.8 | 3650 |
| MANAPPURAM | 285.9 | 282.5 |
| MANKIND | 2149.4 | 2200 |
| MARICO | 737.7 | 730 |
| MARUTI | 16420 | 16300 |
| MAXHEALTH | 1080.4 | 1100 |
| MAZDOCK | 2450.4 | 2550 |
| MCX | 10190 | 10100 |
| MFSL | 1696.9 | 1700 |
| MOTHERSON | 120.29 | 116 |
| MPHASIS | 2890.5 | 2900 |
| MUTHOOTFIN | 3859.9 | 3800 |
| NATIONALUM | 279.15 | 270 |
| NAUKRI | 1360.2 | 1360 |
| NBCC | 115.78 | 114 |
| NCC | 161.64 | 167.5 |
| NESTLEIND | 1239.5 | 1240 |
| NHPC | 77.05 | 77 |
| NMDC | 77.97 | 77 |
| NTPC | 324.15 | 325 |
| NUVAMA | 7272 | 7200 |
| NYKAA | 250.7 | 255 |
| OBEROIRLTY | 1651.3 | 1640 |
| OFSS | 7951 | 8000 |
| OIL | 402.7 | 410 |
| ONGC | 233.8 | 240 |
| PAGEIND | 36720 | 37000 |
| PATANJALI | 532 | 540 |
| PAYTM | 1300.5 | 1300 |
| PERSISTENT | 6306.5 | 6300 |
| PETRONET | 268.5 | 275 |
| PFC | 339.75 | 360 |
| PGEL | 568.9 | 560 |
| PHOENIXLTD | 1783.9 | 1760 |
| PIDILITIND | 1478.1 | 1480 |
| PIIND | 3250.2 | 3350 |
| PNB | 118.48 | 120 |
| PNBHOUSING | 920.6 | 910 |
| POLICYBZR | 1913.1 | 1900 |
| POLYCAB | 7327.5 | 7300 |
| POWERGRID | 262.15 | 270 |
| POWERINDIA | 19445 | 19500 |
| PPLPHARMA | 171.98 | 177.5 |
| PRESTIGE | 1637 | 1660 |
| RBLBANK | 304.55 | 310 |
| RECLTD | 341.15 | 355 |
| RELIANCE | 1555 | 1540 |
| RVNL | 313.5 | 315 |
| SAIL | 131.96 | 132 |
| SAMMAANCAP | 148.89 | 155 |
| SBICARD | 869.9 | 880 |
| SBILIFE | 2030.3 | 2020 |
| SBIN | 967.25 | 965 |
| SHREECEM | 26400 | 26500 |
| SHRIRAMFIN | 864 | 850 |
| SIEMENS | 3148.9 | 3200 |
| SOLARINDS | 12177 | 12750 |
| SONACOMS | 488.25 | 490 |
| SRF | 2994.5 | 2950 |
| SUNPHARMA | 1795.8 | 1800 |
| SUPREMEIND | 3283.7 | 3400 |
| SUZLON | 53.19 | 54 |
| SYNGENE | 660.1 | 650 |
| TATACONSUM | 1160 | 1170 |
| TATAELXSI | 5054.5 | 5000 |
| TATAMOTORS | 0 | 320 |
| TATAPOWER | 380.65 | 390 |
| TATASTEEL | 172.72 | 170 |
| TATATECH | 657.15 | 670 |
| TCS | 3221 | 3200 |
| TECHM | 1577 | 1560 |
| TIINDIA | 2632.1 | 2700 |
| TITAGARH | 792.65 | 800 |
| TITAN | 3862.6 | 3840 |
| TMPV | 345.8 | 360 |
| TORNTPHARM | 3781.7 | 3750 |
| TORNTPOWER | 1287.9 | 1300 |
| TRENT | 4080.8 | 4200 |
| TVSMOTOR | 3639 | 3600 |
| ULTRACEMCO | 11710 | 11700 |
| UNIONBANK | 152.58 | 152.5 |
| UNITDSPR | 1444.2 | 1440 |
| UNOMINDA | 1236.2 | 1280 |
| UPL | 767.9 | 750 |
| VBL | 474.75 | 475 |
| VEDL | 549.2 | 530 |
| VOLTAS | 1384.8 | 1360 |
| WIPRO | 260.44 | 257.5 |
| YESBANK | 21.8 | 22 |
| ZYDUSLIFE | 922.1 | 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.































































































































































































































