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Max Pain in Options Trading

This blog explains the concept of Max Pain in options trading u2014 the price point where most options traders lose the most money. Itu2019s often where a stock tends to settle near expiry. Understanding Max Pain helps traders spot potential price movements and make smarter expiry-day decisions.

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Max Pain in Options Trading

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  1. Read blog - https://navia.co.in/blog/what-is-max-pain-in-options-trading/ Max Pain in Options Trading

  2. What Is Max Pain in Options Trading? Read blog - https://navia.co.in/blog/what-is-max-pain-in-options-trading/ • Ever notice how prices seem to settle near certain strike prices on expiry? • That’s likely the effect of Max Pain. • Max Pain = The strike price where option sellers lose the least and option buyers lose the most. • It’s also called the “Option Pain Point” — the level where the total loss for buyers is maximized.

  3. Why Prices Gravitate Toward Max Pain Read blog - https://navia.co.in/blog/what-is-max-pain-in-options-trading/ On expiry day, stock/index prices often drift toward Max Pain because: • Option sellers (usually institutions) control large positions • They benefit when options expire worthless • The market tends to move in ways that minimize their losses • This causes a “magnet effect” around the Max Pain level

  4. Why Max Pain Matters to Traders Read blog - https://navia.co.in/blog/what-is-max-pain-in-options-trading/ Predictive Power Near Expiry • Helps estimate where the stock/index might settle Reveals Market Psychology • Shows where maximum unwinding or pain can occur Tracks Institutional Activity • Option sellers are often big players; Max Pain hints at their positioning

  5. How to Use Max Pain Wisely Read blog - https://navia.co.in/blog/what-is-max-pain-in-options-trading/ • Use it only near expiry — it’s less useful early in the series • Combine with OI data, trend, and volume • Don’t rely on it alone — treat it as a supporting signal • Check platforms like Navia or Sensibull for daily Max Pain charts

  6. Disclaimer Investment in securities market are subject to market risks, read all the related documents carefully before investing. The securities quoted are for illustrative purposes and are not intended as recommendations. Brokerage will not exceed the SEBI prescribed limit. Navia Markets Ltd ,SEBI Registration No.INZ000095034-NSE Member code for CM, FAO & CD: 07708 - BSE Clearing No. for CM, FAO & CD: 6341-MCX Member ID: 45345 NSDL DP ID: IN300378-CDSL DP ID: 12086500-SEBI Registration No. for DP: IN-DP-311-2017-GST Registration number :33AAACM4739R2ZZ-Registered office: Ganga Griha, 4th & 5th Floor, No.9, Nungambakkam High Road, Chennai - 600 034 Email ID: ig@navia.co.in - Contact No: +91 70100 75500 https://bit.ly/naviadisclaimer Read blog - https://navia.co.in/blog/what-is-max-pain-in-options-trading/

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