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.

TATAPOWER

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.

Tata Power Co Ltd

374.2 -6.55 (-1.72%)

L: 373.05 H: 381.85

Max Pain - TATAPOWER

08 Jan 2026 04:10 PM IST

Expiry

Max-Pain

385

DFC

7D Avg

Reliability

14D Avg

Reliability

21D Avg

Reliability

Max Pain for TATAPOWER is 385

Historical data for TATAPOWER-385-CE

LTP (385 CE)

3.15 -2.6

Open Interest

1529 271

Historical data for TATAPOWER-385-PE

LTP (385 PE)

13.15 5.25

Open Interest

1386 -50

Strike 310 has a total call value of 0 versus a total put value of 218,301,850,000 Combined total value = 218,301,850,000

Strike 312.5 has a total call value of 4,350,000 versus a total put value of 211,183,800,000 Combined total value = 211,188,150,000

Strike 315 has a total call value of 8,700,000 versus a total put value of 204,065,750,000 Combined total value = 204,074,450,000

Strike 317.5 has a total call value of 13,050,000 versus a total put value of 196,947,700,000 Combined total value = 196,960,750,000

Strike 320 has a total call value of 17,400,000 versus a total put value of 189,829,650,000 Combined total value = 189,847,050,000

Strike 322.5 has a total call value of 30,812,500 versus a total put value of 182,716,675,000 Combined total value = 182,747,487,500

Strike 325 has a total call value of 44,225,000 versus a total put value of 175,603,700,000 Combined total value = 175,647,925,000

Strike 327.5 has a total call value of 57,637,500 versus a total put value of 168,490,725,000 Combined total value = 168,548,362,500

Strike 330 has a total call value of 71,050,000 versus a total put value of 161,377,750,000 Combined total value = 161,448,800,000

Strike 332.5 has a total call value of 98,600,000 versus a total put value of 154,290,512,500 Combined total value = 154,389,112,500

Strike 335 has a total call value of 126,150,000 versus a total put value of 147,203,275,000 Combined total value = 147,329,425,000

Strike 337.5 has a total call value of 153,700,000 versus a total put value of 140,116,400,000 Combined total value = 140,270,100,000

Strike 340 has a total call value of 181,250,000 versus a total put value of 133,029,525,000 Combined total value = 133,210,775,000

Strike 342.5 has a total call value of 232,000,000 versus a total put value of 126,024,937,500 Combined total value = 126,256,937,500

Strike 345 has a total call value of 282,750,000 versus a total put value of 119,020,350,000 Combined total value = 119,303,100,000

Strike 347.5 has a total call value of 334,587,500 versus a total put value of 112,070,137,500 Combined total value = 112,404,725,000

Strike 350 has a total call value of 386,425,000 versus a total put value of 105,119,925,000 Combined total value = 105,506,350,000

Strike 352.5 has a total call value of 449,137,500 versus a total put value of 98,399,537,500 Combined total value = 98,848,675,000

Strike 355 has a total call value of 511,850,000 versus a total put value of 91,691,837,500 Combined total value = 92,203,687,500

Strike 357.5 has a total call value of 580,000,000 versus a total put value of 85,083,462,500 Combined total value = 85,663,462,500

Strike 360 has a total call value of 648,150,000 versus a total put value of 78,482,700,000 Combined total value = 79,130,850,000

Strike 362.5 has a total call value of 750,737,500 versus a total put value of 72,460,487,500 Combined total value = 73,211,225,000

Strike 365 has a total call value of 853,325,000 versus a total put value of 66,477,787,500 Combined total value = 67,331,112,500

Strike 367.5 has a total call value of 1,004,125,000 versus a total put value of 60,870,637,500 Combined total value = 61,874,762,500

Strike 370 has a total call value of 1,154,925,000 versus a total put value of 55,348,312,500 Combined total value = 56,503,237,500

Strike 372.5 has a total call value of 1,534,462,500 versus a total put value of 50,369,012,500 Combined total value = 51,903,475,000

Strike 375 has a total call value of 1,946,625,000 versus a total put value of 45,460,400,000 Combined total value = 47,407,025,000

Strike 377.5 has a total call value of 2,869,912,500 versus a total put value of 40,986,425,000 Combined total value = 43,856,337,500

Strike 380 has a total call value of 3,933,850,000 versus a total put value of 36,616,487,500 Combined total value = 40,550,337,500

Strike 382.5 has a total call value of 6,378,912,500 versus a total put value of 33,246,325,000 Combined total value = 39,625,237,500

Strike 385 has a total call value of 8,978,762,500 versus a total put value of 29,967,150,000 Combined total value = 38,945,912,500

Strike 387.5 has a total call value of 12,132,875,000 versus a total put value of 27,190,400,000 Combined total value = 39,323,275,000

Strike 390 has a total call value of 15,464,612,500 versus a total put value of 24,519,137,500 Combined total value = 39,983,750,000

Strike 392.5 has a total call value of 20,242,000,000 versus a total put value of 22,473,187,500 Combined total value = 42,715,187,500

Strike 395 has a total call value of 25,138,650,000 versus a total put value of 20,507,712,500 Combined total value = 45,646,362,500

Strike 397.5 has a total call value of 30,484,800,000 versus a total put value of 18,643,375,000 Combined total value = 49,128,175,000

Strike 400 has a total call value of 35,916,862,500 versus a total put value of 16,791,362,500 Combined total value = 52,708,225,000

Strike 402.5 has a total call value of 43,123,000,000 versus a total put value of 15,421,837,500 Combined total value = 58,544,837,500

Strike 405 has a total call value of 50,372,637,500 versus a total put value of 14,054,850,000 Combined total value = 64,427,487,500

Strike 407.5 has a total call value of 57,840,862,500 versus a total put value of 12,696,200,000 Combined total value = 70,537,062,500

Strike 410 has a total call value of 65,326,125,000 versus a total put value of 11,337,550,000 Combined total value = 76,663,675,000

Strike 412.5 has a total call value of 73,260,162,500 versus a total put value of 10,202,925,000 Combined total value = 83,463,087,500

Strike 415 has a total call value of 81,216,675,000 versus a total put value of 9,068,300,000 Combined total value = 90,284,975,000

Strike 417.5 has a total call value of 89,317,462,500 versus a total put value of 7,970,650,000 Combined total value = 97,288,112,500

Strike 420 has a total call value of 97,421,512,500 versus a total put value of 6,873,000,000 Combined total value = 104,294,512,500

Strike 422.5 has a total call value of 105,977,600,000 versus a total put value of 6,143,287,500 Combined total value = 112,120,887,500

Strike 425 has a total call value of 114,533,687,500 versus a total put value of 5,413,575,000 Combined total value = 119,947,262,500

Strike 427.5 has a total call value of 123,114,062,500 versus a total put value of 4,705,975,000 Combined total value = 127,820,037,500

Strike 430 has a total call value of 131,694,437,500 versus a total put value of 3,998,375,000 Combined total value = 135,692,812,500

Strike 432.5 has a total call value of 140,429,962,500 versus a total put value of 3,445,562,500 Combined total value = 143,875,525,000

Strike 435 has a total call value of 149,165,487,500 versus a total put value of 2,892,750,000 Combined total value = 152,058,237,500

Strike 437.5 has a total call value of 157,939,800,000 versus a total put value of 2,340,300,000 Combined total value = 160,280,100,000

Strike 440 has a total call value of 166,714,112,500 versus a total put value of 1,787,850,000 Combined total value = 168,501,962,500

Strike 442.5 has a total call value of 175,661,700,000 versus a total put value of 1,529,387,500 Combined total value = 177,191,087,500

Strike 445 has a total call value of 184,609,287,500 versus a total put value of 1,270,925,000 Combined total value = 185,880,212,500

Strike 447.5 has a total call value of 193,568,112,500 versus a total put value of 1,012,462,500 Combined total value = 194,580,575,000

Strike 450 has a total call value of 202,526,937,500 versus a total put value of 754,000,000 Combined total value = 203,280,937,500

Strike 452.5 has a total call value of 211,536,512,500 versus a total put value of 565,500,000 Combined total value = 212,102,012,500

Strike 455 has a total call value of 220,546,087,500 versus a total put value of 377,000,000 Combined total value = 220,923,087,500

Strike 457.5 has a total call value of 229,555,662,500 versus a total put value of 188,500,000 Combined total value = 229,744,162,500

Strike 460 has a total call value of 238,565,237,500 versus a total put value of 0 Combined total value = 238,565,237,500

Max-Pain Table for Stocks

Max-Pain Table Expiry

Commodity Max-Pain Table

Index Max-Pain Table

LTP > Max Pain Bearish

LTP < Max Pain Bullish

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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