What is max pain in options?
In one line: Max pain is the strike price where option buyers, as a group, would lose the most money if the stock closed there at expiry, because the options they hold would pay out the least.
How it works
Max pain is a number worked out from Open interest: how many call and put contracts are still open at each Strike price for one Expiration date.
You test every strike as a possible closing price. At each one, you add up what every open option would be worth at expiry. Calls pay when the stock closes above their strike. Puts pay when it closes below. The strike with the smallest total payout is max pain.
It describes where option holders would be paid the least. It does not say where the stock will go.
An example (hypothetical)
A made-up stock, XYZ, has three strikes open for one expiry:
- Calls: 200 contracts at $40, 300 at $45, 500 at $50.
- Puts: 400 contracts at $40, 300 at $45, 100 at $50.
One contract covers 100 shares. Here's what all of them would pay out at each close:
| XYZ closes at | Calls pay | Puts pay | Total paid to holders |
|---|---|---|---|
| $40 | $0 | $250,000 | $250,000 |
| $45 | $100,000 | $50,000 | $150,000 (lowest) |
| $50 | $350,000 | $0 | $350,000 |
At $45, the open options pay out the least. So max pain is $45.
How the $45 row is built: the $40 calls are $5 in the money, so 200 × 100 × $5 = $100,000. The $50 puts are $5 in the money, so 100 × 100 × $5 = $50,000. Everything else expires worthless.
Why it matters for sellers
Some traders believe a stock gets pulled toward max pain as expiry nears. Nobody has shown us proof of that we'd trust, and open interest changes every day, so the number moves too. My guide does max pain work? goes through the case for and against.
Here's the risk of trusting it. Say you sell the $45 put on XYZ for $1.00 because "it'll pin at max pain."
| XYZ at expiry | What happens | Your result |
|---|---|---|
| $45 or higher | Put expires | +$100 |
| $44 | Assigned at $45, shares worth $44 | $0 |
| $38 | Assigned at $45, shares worth $38 | −$600 |
Max pain didn't stop the drop. A seller still sizes the trade as if they'll buy the shares, the same way as in the wheel strategy. Closes near a big strike also bring Pin risk.
Questions
Where do I find max pain?
Some options sites and broker tools show it. You can also work it out yourself from the open interest column of an Options chain, as in the table above, or paste it into our max pain calculator.
Does max pain change during the week?
Yes. Open interest updates each day as contracts open and close, so the max pain strike can move right up to expiry.
Is max pain the same for every expiry date?
No. Each expiry has its own open contracts, so each one has its own max pain strike.
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