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.

ITC

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.

Itc Ltd

402.3 0.00 (0.00%)

L: 401.05 H: 405.75

Max Pain - ITC

16 Dec 2025 02:52 PM IST

Live

Expiry

Max Pain for ITC is 405

Historical data for ITC-405-CE

LTP (405 CE)

3.05 -0.15

Open Interest

5567 -6

Historical data for ITC-405-PE

LTP (405 PE)

4.5 0.15

Open Interest

2050 42

Strike 340 has a total call value of 0 versus a total put value of 207,305,200,000 Combined total value = 207,305,200,000

Strike 342.5 has a total call value of 0 versus a total put value of 198,341,200,000 Combined total value = 198,341,200,000

Strike 345 has a total call value of 0 versus a total put value of 189,377,200,000 Combined total value = 189,377,200,000

Strike 347.5 has a total call value of 0 versus a total put value of 180,414,400,000 Combined total value = 180,414,400,000

Strike 350 has a total call value of 0 versus a total put value of 171,451,600,000 Combined total value = 171,451,600,000

Strike 352.5 has a total call value of 0 versus a total put value of 162,516,400,000 Combined total value = 162,516,400,000

Strike 355 has a total call value of 0 versus a total put value of 153,581,200,000 Combined total value = 153,581,200,000

Strike 357.5 has a total call value of 0 versus a total put value of 144,657,600,000 Combined total value = 144,657,600,000

Strike 360 has a total call value of 0 versus a total put value of 135,734,000,000 Combined total value = 135,734,000,000

Strike 362.5 has a total call value of 0 versus a total put value of 126,853,600,000 Combined total value = 126,853,600,000

Strike 365 has a total call value of 0 versus a total put value of 117,973,200,000 Combined total value = 117,973,200,000

Strike 367.5 has a total call value of 0 versus a total put value of 109,097,600,000 Combined total value = 109,097,600,000

Strike 370 has a total call value of 0 versus a total put value of 100,222,000,000 Combined total value = 100,222,000,000

Strike 372.5 has a total call value of 1,600,000 versus a total put value of 91,486,800,000 Combined total value = 91,488,400,000

Strike 375 has a total call value of 3,200,000 versus a total put value of 82,755,600,000 Combined total value = 82,758,800,000

Strike 377.5 has a total call value of 7,200,000 versus a total put value of 74,540,000,000 Combined total value = 74,547,200,000

Strike 380 has a total call value of 14,000,000 versus a total put value of 66,796,000,000 Combined total value = 66,810,000,000

Strike 382.5 has a total call value of 126,400,000 versus a total put value of 59,512,000,000 Combined total value = 59,638,400,000

Strike 385 has a total call value of 238,800,000 versus a total put value of 52,263,200,000 Combined total value = 52,502,000,000

Strike 387.5 has a total call value of 358,400,000 versus a total put value of 45,262,000,000 Combined total value = 45,620,400,000

Strike 390 has a total call value of 478,000,000 versus a total put value of 38,422,000,000 Combined total value = 38,900,000,000

Strike 392.5 has a total call value of 712,000,000 versus a total put value of 33,114,000,000 Combined total value = 33,826,000,000

Strike 395 has a total call value of 961,200,000 versus a total put value of 28,011,600,000 Combined total value = 28,972,800,000

Strike 397.5 has a total call value of 1,281,600,000 versus a total put value of 23,294,800,000 Combined total value = 24,576,400,000

Strike 400 has a total call value of 1,652,400,000 versus a total put value of 18,708,400,000 Combined total value = 20,360,800,000

Strike 402.5 has a total call value of 3,092,000,000 versus a total put value of 15,295,600,000 Combined total value = 18,387,600,000

Strike 405 has a total call value of 4,894,000,000 versus a total put value of 12,328,400,000 Combined total value = 17,222,400,000

Strike 407.5 has a total call value of 8,922,800,000 versus a total put value of 10,181,200,000 Combined total value = 19,104,000,000

Strike 410 has a total call value of 13,318,000,000 versus a total put value of 8,284,000,000 Combined total value = 21,602,000,000

Strike 412.5 has a total call value of 20,413,600,000 versus a total put value of 7,118,400,000 Combined total value = 27,532,000,000

Strike 415 has a total call value of 27,774,000,000 versus a total put value of 6,043,600,000 Combined total value = 33,817,600,000

Strike 417.5 has a total call value of 35,976,000,000 versus a total put value of 5,146,000,000 Combined total value = 41,122,000,000

Strike 420 has a total call value of 44,293,200,000 versus a total put value of 4,259,200,000 Combined total value = 48,552,400,000

Strike 422.5 has a total call value of 53,908,000,000 versus a total put value of 3,774,000,000 Combined total value = 57,682,000,000

Strike 425 has a total call value of 63,590,800,000 versus a total put value of 3,298,800,000 Combined total value = 66,889,600,000

Strike 427.5 has a total call value of 73,596,000,000 versus a total put value of 2,872,800,000 Combined total value = 76,468,800,000

Strike 430 has a total call value of 83,639,200,000 versus a total put value of 2,448,000,000 Combined total value = 86,087,200,000

Strike 432.5 has a total call value of 94,344,800,000 versus a total put value of 2,129,600,000 Combined total value = 96,474,400,000

Strike 435 has a total call value of 105,120,400,000 versus a total put value of 1,813,600,000 Combined total value = 106,934,000,000

Strike 437.5 has a total call value of 116,239,600,000 versus a total put value of 1,515,600,000 Combined total value = 117,755,200,000

Strike 440 has a total call value of 127,592,400,000 versus a total put value of 1,217,600,000 Combined total value = 128,810,000,000

Strike 442.5 has a total call value of 139,526,800,000 versus a total put value of 990,000,000 Combined total value = 140,516,800,000

Strike 445 has a total call value of 151,468,800,000 versus a total put value of 762,400,000 Combined total value = 152,231,200,000

Strike 447.5 has a total call value of 163,503,600,000 versus a total put value of 536,400,000 Combined total value = 164,040,000,000

Strike 450 has a total call value of 175,547,600,000 versus a total put value of 310,400,000 Combined total value = 175,858,000,000

Strike 452.5 has a total call value of 189,028,400,000 versus a total put value of 266,000,000 Combined total value = 189,294,400,000

Strike 455 has a total call value of 202,509,200,000 versus a total put value of 221,600,000 Combined total value = 202,730,800,000

Strike 457.5 has a total call value of 215,995,200,000 versus a total put value of 178,800,000 Combined total value = 216,174,000,000

Strike 460 has a total call value of 229,481,200,000 versus a total put value of 136,000,000 Combined total value = 229,617,200,000

Strike 462.5 has a total call value of 243,056,800,000 versus a total put value of 105,200,000 Combined total value = 243,162,000,000

Strike 465 has a total call value of 256,632,400,000 versus a total put value of 74,400,000 Combined total value = 256,706,800,000

Strike 467.5 has a total call value of 270,208,400,000 versus a total put value of 43,600,000 Combined total value = 270,252,000,000

Strike 470 has a total call value of 283,784,400,000 versus a total put value of 12,800,000 Combined total value = 283,797,200,000

Strike 472.5 has a total call value of 297,390,400,000 versus a total put value of 9,600,000 Combined total value = 297,400,000,000

Strike 475 has a total call value of 310,996,400,000 versus a total put value of 6,400,000 Combined total value = 311,002,800,000

Strike 477.5 has a total call value of 324,607,200,000 versus a total put value of 3,200,000 Combined total value = 324,610,400,000

Strike 480 has a total call value of 338,218,000,000 versus a total put value of 0 Combined total value = 338,218,000,000

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	1129.3	1140
ABB	5242.5	5200
ABCAPITAL	348.2	350
ADANIENSOL	995.4	990
ADANIENT	2248.5	2300
ADANIGREEN	1027.3	1020
ADANIPORTS	1503	1500
ALKEM	5658.5	5700
AMBER	6780	6800
AMBUJACEM	549.45	550
ANGELONE	2538	2600
APLAPOLLO	1731.4	1740
APOLLOHOSP	7046	7200
ASHOKLEY	167.77	160
ASIANPAINT	2793.1	2800
ASTRAL	1462	1460
AUBANK	980.75	960
AUROPHARMA	1179.4	1200
AXISBANK	1222.5	1240
BAJAJ-AUTO	9019.5	9000
BAJAJFINSV	2039.8	2060
BAJFINANCE	999.3	1020
BANDHANBNK	149.39	150
BANKBARODA	282.4	290
BANKINDIA	139.8	143
BDL	1355.1	1400
BEL	388.2	400
BHARATFORG	1418.2	1400
BHARTIARTL	2101.9	2100
BHEL	278.75	280
BIOCON	384.85	390
BLUESTARCO	1816.2	1780
BOSCHLTD	36220	36500
BPCL	366.85	362.5
BRITANNIA	6071	6000
BSE	2600.5	2700
CAMS	754.2	780
CANBK	147.35	148
CDSL	1504.6	1560
CGPOWER	672.6	680
CHOLAFIN	1716.9	1700
CIPLA	1498.9	1520
COALINDIA	381.65	384.75
COFORGE	1854.8	1840
COLPAL	2162	2180
CONCOR	500.3	520
CROMPTON	253.1	265
CUMMINSIND	4490	4500
CYIENT	1151.1	1160
DABUR	497.65	505
DALBHARAT	2059.9	2040
DELHIVERY	401.85	410
DIVISLAB	6305	6400
DIXON	13640	13750
DLF	691.4	720
DMART	3842.8	3900
DRREDDY	1281.2	1270
EICHERMOT	7086	7100
ETERNAL	285.5	295
EXIDEIND	366.1	375
FEDERALBNK	262.4	260
FORTIS	876.75	890
GAIL	168.09	175
GLENMARK	1967.5	1940
GMRAIRPORT	103.26	102
GODREJCP	1183.8	1160
GODREJPROP	2026	2080
GRASIM	2802.5	2800
HAL	4258	4500
HAVELLS	1415.1	1440
HCLTECH	1650.5	1660
HDFCAMC	2580.9	2625
HDFCBANK	994.2	1000
HDFCLIFE	766.4	770
HEROMOTOCO	5948	6050
HFCL	65.62	68
HINDALCO	837.4	820
HINDPETRO	463.8	460
HINDUNILVR	2285.4	2300
HINDZINC	567.15	540
HUDCO	211.39	220
ICICIBANK	1363.7	1380
ICICIGI	1947.5	1980
ICICIPRULI	641	630
IDEA	11.28	11
IDFCFIRSTB	83.48	81
IEX	140.49	145
IIFL	567.3	560
INDHOTEL	724.35	740
INDIANB	774.25	820
INDIGO	4978.5	5000
INDUSINDBK	844.5	850
INDUSTOWER	407.65	410
INFY	1592.3	1600
INOXWIND	126.09	130
IOC	167.51	165
IRCTC	670.95	690
IREDA	133.86	140
IRFC	112.21	116
ITC	402.3	405
JINDALSTEL	1014	1030
JIOFIN	295.75	305
JSWENERGY	476.95	490
JSWSTEEL	1085.3	1130
JUBLFOOD	561.15	580
KALYANKJIL	478.1	480
KAYNES	4179	4400
KEI	4153.9	4100
KFINTECH	1033.9	1060
KOTAKBANK	2184.1	2160
KPITTECH	1171.1	1200
LAURUSLABS	999	1000
LICHSGFIN	526.5	550
LICI	854.3	880
LODHA	1075.3	1120
LT	4063.4	4040
LTF	300.35	302.5
LTIM	6211	6150
LUPIN	2088.8	2080
M&M	3629.6	3650
MANAPPURAM	283.7	280
MANKIND	2107.9	2200
MARICO	738.9	740
MARUTI	16392	16300
MAXHEALTH	1074.7	1100
MAZDOCK	2410.4	2600
MCX	10155	10100
MFSL	1673.5	1700
MOTHERSON	119.84	116
MPHASIS	2854.1	2900
MUTHOOTFIN	3836.4	3750
NATIONALUM	276.3	270
NAUKRI	1345.8	1360
NBCC	111.75	113
NCC	158.29	167.5
NESTLEIND	1243.9	1240
NHPC	75.91	78
NMDC	77.09	77
NTPC	321.25	325
NUVAMA	7214.5	7200
NYKAA	246.75	255
OBEROIRLTY	1633	1660
OFSS	7857	8000
OIL	401.6	410
ONGC	232.4	240
PAGEIND	36335	37500
PATANJALI	536.9	545
PAYTM	1279.7	1300
PERSISTENT	6195	6200
PETRONET	264.75	277.5
PFC	335.35	355
PGEL	571.75	560
PHOENIXLTD	1779.5	1740
PIDILITIND	1471.7	1480
PIIND	3253.5	3350
PNB	117.01	120
PNBHOUSING	912.05	910
POLICYBZR	1819.6	1860
POLYCAB	7330.5	7300
POWERGRID	261.5	270
POWERINDIA	19305	19500
PPLPHARMA	168.96	180
PRESTIGE	1629.9	1660
RBLBANK	299.45	310
RECLTD	335.6	355
RELIANCE	1542.9	1540
RVNL	309.65	315
SAIL	128.77	132
SAMMAANCAP	146.83	155
SBICARD	849.75	870
SBILIFE	2042	2020
SBIN	964.55	970
SHREECEM	25980	26500
SHRIRAMFIN	853.05	850
SIEMENS	3153	3200
SOLARINDS	11933	12500
SONACOMS	485.05	500
SRF	3016.5	2950
SUNPHARMA	1784.4	1800
SUPREMEIND	3409.9	3400
SUZLON	52.4	54
SYNGENE	647.2	650
TATACONSUM	1171	1170
TATAELXSI	4999.5	5100
TATAMOTORS	0	320
TATAPOWER	379.5	390
TATASTEEL	169.96	170
TATATECH	650.5	680
TCS	3208.9	3200
TECHM	1576.3	1540
TIINDIA	2622.7	2700
TITAGARH	790.55	800
TITAN	3919.7	3860
TMPV	345.9	360
TORNTPHARM	3771.5	3800
TORNTPOWER	1281.7	1300
TRENT	4102.7	4200
TVSMOTOR	3616	3600
ULTRACEMCO	11551	11700
UNIONBANK	152.88	152.5
UNITDSPR	1448.5	1440
UNOMINDA	1259.6	1280
UPL	750	750
VBL	477.8	470
VEDL	564.25	540
VOLTAS	1397.4	1380
WIPRO	259.2	255
YESBANK	21.46	22
ZYDUSLIFE	917.25	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.

Related Pages for ITC

ITC

360ONE

ABB

ABCAPITAL

ADANIENSOL

ADANIENT

ADANIGREEN

ADANIPORTS

ALKEM

AMBER

AMBUJACEM

ANGELONE

APLAPOLLO

APOLLOHOSP

ASHOKLEY

ASIANPAINT

ASTRAL

AUBANK

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