Max pain

Max pain is the strike price at which the options expiring on a given date would pay out the least in total, so option buyers as a group lose the most. Max pain theory holds that price tends to drift toward that strike into expiration.

How traders use max pain#

• Into expiry. The pull, if any, is strongest on expiration day and in the last hours before the close.
• As confluence. Max pain carries more weight when it lines up with a heavy strike, a wall or the Abs Gamma strike.
• Far from expiry it says little: the options behind it can change many times before they expire.

Max pain vs pinning#

Pinning is when price settles near a large strike into expiry because dealer hedging around that strike keeps pulling it back. Max pain and the biggest gamma strike often sit close together, which is one reason max pain appears to work on some expiries. When they disagree, the gamma strike is usually the stronger magnet.

Max pain in q-bitf#

q-bitf shows max pain with the other key levels, alongside the Abs Gamma strike, so you can see at a glance whether the two agree.

Questions#

What is max pain in options?#

The strike at which the options expiring on a date would pay out the least in total. Max pain theory says price tends to drift toward it into expiry.

Does max pain work?#

Sometimes, mainly on expiration day and when it lines up with a large gamma strike. Far from expiry, or on trend days, it carries little weight.

Is max pain the same as the pin?#

Not exactly. The pin is the strike price gravitates to because of dealer hedging; max pain is where option payouts are smallest. They are often close together.