Banknifty Max Pain

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. If the market changes but the maximum pain level remain unchanged, the market will most likely reach the maximum pain level. Any options contract's maximum pain level will be displayed on the max pain chart.

All you need to do is to select the contract in the contract section, it will automatically plot the Nifty max pain, max pain Bank Nifty and other options max pain.

What Is Max Pain?

The max pain 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 situation is defined by the stock price (the underlying asset) engaged in the strike price of the options contract at the date of expiry.

The max pain aims to determine how options traders can suffer big losses if the underlying asset’s spot price locks in with the contract’s strike price.

Options Max Pain Calculator

Max pain is calculated using the Open Interest of options. The calculation is simple and is summed up below

• You need to list down the different strikes of the option chain along with their open interests.

• You need to calculate the profit/loss incurred to the option writers if the underlying expires at that level. This calculation should sum up the profit/loss for put as well as call option at that strike price.

• The strike price where the loss is minimum is called the Max Pain strike price.