What is Max Pain?
Max pain is the strike price at which the total value of all open call and put options would be lowest at expiry, which is the price where option buyers as a group would lose the most. It is also called the option pain point.
On this page
How is max pain calculated?
Take each strike in turn as the possible expiry price. For every open call, add (expiry price minus strike) times its OI when that is positive. For every open put, add (strike minus expiry price) times its OI when positive. The strike where this total payout is smallest is the max pain strike.
It sounds heavy but it is mechanical, which is why every option chain tool calculates it for you.
What is max pain in NIFTY?
It is the NIFTY strike, for the current expiry, where the combined payout to option buyers would be lowest. Because NIFTY OI is spread across many strikes, max pain usually sits close to where the biggest call and put OI walls meet.
Does the market really move to max pain?
Sometimes, mostly in the last day or two before expiry and mostly in quiet weeks. The idea is that writers, who hold most of the OI, benefit when the index settles near max pain and trade to keep it there. In trending weeks NIFTY simply runs past it. Treat max pain as a reference level, never as a target.
Why does max pain change during the day?
It is recalculated from live OI, so fresh writing or unwinding at big strikes moves it. Early in the expiry week it can jump by 100 points in a session; on expiry day it usually steadies.
Where can I see NIFTY max pain?
AOC shows MAX PAIN below the option chain with its distance from spot, and the free public page /optionchain/nifty shows it with a 15-minute delay.
