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Futures & options
Also called: Max pain point, Option pain
Max pain is the strike price at which option buyers, taken together, would lose the most — and option writers pay out the least — if the contracts expired there. It is calculated from the open interest at every strike of one expiry.
For each candidate expiry price K: Payout(K) = Σ Call OI × max(0, K − Strike) + Σ Put OI × max(0, Strike − K). Max pain is the K with the smallest payout.
If, across a Nifty expiry, the total intrinsic value that option writers would owe is smallest at 24,500 — less than at 24,400 or 24,600 — then 24,500 is the max pain strike for that expiry.
Max pain changes as open interest changes through the series. It describes today's positioning; it is not a forecast of where the index will expire.
Max pain is the strike price at which option buyers, taken together, would lose the most — and option writers pay out the least — if the contracts expired there. It is calculated from the open interest at every strike of one expiry.
For each candidate expiry price K: Payout(K) = Σ Call OI × max(0, K − Strike) + Σ Put OI × max(0, Strike − K). Max pain is the K with the smallest payout.. If, across a Nifty expiry, the total intrinsic value that option writers would owe is smallest at 24,500 — less than at 24,400 or 24,600 — then 24,500 is the max pain strike for that expiry.
No. Max pain describes one aspect of a company, a price or a contract, and it is best read alongside other numbers and the business itself. Jivani Markets is a research and education platform; it does not give buy, sell or hold recommendations.