Max Pain in options: what it is, how to calculate it, and how far to trust it

The strike where all open options would be worth the least at expiry, worked out strike by strike, and why the answer moves during the day.

By the EzyOptions Team · Updated 2026-10-12

What is Max Pain?

Max Pain is the expiry price at which the total value of all open options, calls and puts together, would be smallest. At that price option buyers as a group would recover the least and option writers would pay out the least. It is computed from open interest alone, so it describes how the option book is balanced. The chain guide introduces it; this page works it through.

How to calculate Max Pain

Take one strike as the price the index expires at.
Every call with a strike below it finishes in the money: multiply the gap by that strike's call open interest.
Every put with a strike above it finishes in the money: multiply the gap by that strike's put open interest.
Add both to get what all open options would be worth at that price.
Repeat for every strike. The one with the smallest total is Max Pain.

An illustrative NIFTY chain: open interest in contracts, values in points × contracts if NIFTY expires at that strike
Strike	Call OI	Put OI	Calls worth	Puts worth	Total
23,800	1,200	7,000	0	50,70,000	50,70,000
23,900	2,400	8,200	1,20,000	26,50,000	27,70,000
24,000	5,600	9,100	4,80,000	10,50,000	15,30,000
24,100	7,400	4,200	14,00,000	3,60,000	17,60,000
24,200	9,300	1,800	30,60,000	90,000	31,50,000
24,300	6,100	900	56,50,000	0	56,50,000

The total is smallest at 24,000, so that is this chain's Max Pain. Notice what drives it: below 24,000 the heavy put open interest becomes valuable quickly, and above it the heavy call open interest does. Max Pain sits where those two weights balance.

Why the Max Pain strike moves during the day

Open interest changes with every position opened or closed, so Max Pain is recalculated through the session and the strike can shift. Suppose 9,000 puts are written at 24,100 by the afternoon, with everything else unchanged. Those puts are worth something at every expiry price below 24,100, which raises the totals on the lower strikes.

The same chain in the afternoon, after 9,000 puts are opened at 24,100
Strike	Put OI	Total if NIFTY expires here
23,800	7,000	77,70,000
23,900	8,200	45,70,000
24,000	9,100	24,30,000
24,100	13,200	17,60,000
24,200	1,800	31,50,000
24,300	900	56,50,000

Max Pain moves from 24,000 to 24,100. Nothing about the index changed; only the book did. That is the first thing to remember about any Max Pain reading: it is a snapshot of positions at a moment, and it is most stable late in an expiry, when fewer new positions are being opened.

The Max Pain theory, and how far to trust it

The theory attached to Max Pain is that the index tends to drift towards it into expiry. The usual reasons given are that option writers, who hold the larger positions, hedge in ways that lean the market towards their least costly outcome, and that heavy open interest at nearby strikes slows the index as expiry approaches. Some expiries do settle near Max Pain. Many settle well away from it, especially when news or a large move arrives in the final days.

Use it as a reference point for where the option book is balanced, alongside the put-call ratio and the open interest per strike. It is a calculation on today's positions, not a forecast of where the index will close.

Max Pain: common questions

What does Max Pain mean in the option chain?

Max Pain is the expiry price at which all open options for that expiry would be worth the least in total. It is calculated from the open interest at every strike, and it marks where the option book is balanced between calls and puts.

How is Max Pain calculated?

Take each strike in turn as the expiry price. For every call strike below it, multiply the gap by the call open interest; for every put strike above it, multiply the gap by the put open interest. Add everything up, and the strike with the smallest total is Max Pain.

Does NIFTY expire at Max Pain?

Sometimes it settles near Max Pain, often it does not. Max Pain is recomputed as open interest changes, so the strike moves during the session, and news or a large move late in the expiry can carry the index well away from it. It is a reference point, not a prediction.

Why does Max Pain change during the day?

Because it is calculated from open interest, which changes with every position opened or closed. In the example on this page, 9,000 puts written at 24,100 move Max Pain from 24,000 to 24,100 without the index moving at all.