What is max pain?
Max pain is the strike at which the total payout to option holders at expiry would be the smallest.
How it works
For every possible expiry price, add up what all call and put holders would receive. The price where this total is lowest is the max pain strike. Writers collectively pay the least there, which is why the idea exists.
The theory and its limits
The theory says price tends to drift toward max pain near expiry. Evidence is mixed, and the effect, if any, is small compared with news and flows. Open interest also changes right up to expiry, so max pain moves too.
How we show it
We show max pain and its distance from spot as a reference point only. It is not a target and not a recommendation.
Related tools and reports
Educational content, not investment advice. F&O trading can lose more than you put in.