Max pain

31/01/2022

Max pain is the financial situation that is looked at from the perspective of option sellers or option buyers. According to the max pain theory, expiry frequently occurs at the levels when option purchasers have the most losses or pain, while option sellers have the most profit.

What is max pain?

The max pain option is the price at which the stock can cause the highest level of financial losses for all the options buyers who have the contracts at that strike price at the time of expiration. 

The max pain metric is used to measure how options traders might lose a lot of money if the spot price of the underlying asset coincides with the strike price of the contract.

Why to use the max pain chart?

You may now readily determine the strike price at which maximum losses can occur when a contract expires on a specific strike price by using the Options Max pain chart feature in options trading.

Simply choose the contract in the contract area, and the Nifty max pain, max pain Bank Nifty, and other options max pain will be plotted automatically.

Using the max pain chart, you can easily track the max pain Nifty data. The green bars indicate the put pain and the red bars indicate call pain for a particular strike price.