BankNifty Max Pain
What is Max Pain/Option Pain?
Max pain is the point where option buyers feel “maximum pain/loss” or will stand to lose the most money and Option sellers, on the other hand, may stand to reap the most reward. In general, 90% of the options expire worthless, hence option writers/sellers tend to make money more often, more consistently than the option buyers.
How to Calculate Max Pain?
Follow the below steps to calculate Max Pain manually.
Step 1: List down all the strikes of a derivative and note down its Call and Put Open Interest corresponding to each Strike.
Step 2: For each Strike, assume that the derivative contract ends at that Strike on expiry.
Step 3: Calculate how much money is lost by the Option Writers/Sellers (both Call and Put Option)
Step 4: Add up the money lost by both Call and Put option sellers.
Step 5: Identify the Strike at which the money lost by Option Sellers is least.
It is the Strike price point at which most pain is witnessed by the Option Buyers and it is the price at which the derivative contract will expire.
BankNifty Max Pain Chart & Data for this Expiry
[gdoc key=”https://docs.google.com/spreadsheets/d/1TMkX6ciSJXeXVawuxPmyfcnmXd6o5naazXlLGEDGO5k/edit?usp=sharing” gid=”0″ query=”select AI,AJ where AK=’Display'” class=”no-datatables”]
[gdoc key=”https://docs.google.com/spreadsheets/d/1TMkX6ciSJXeXVawuxPmyfcnmXd6o5naazXlLGEDGO5k/edit?usp=sharing” gid=”0″ query=”select AO,AP where AQ=’Display'” class=”no-datatables”]
[gdoc key=”https://docs.google.com/spreadsheets/d/1TMkX6ciSJXeXVawuxPmyfcnmXd6o5naazXlLGEDGO5k/edit?usp=sharing” gid=”0″ query=”select AL,AM where AN=’Display'” class=”no-datatables”]
[gdoc key=”https://docs.google.com/spreadsheets/d/1TMkX6ciSJXeXVawuxPmyfcnmXd6o5naazXlLGEDGO5k/edit?usp=sharing” gid=”0″ query=”select AF,AE where Z is not null” chart=”column” chart_height=”1000″ chart_width=”1500″ title=”BankNifty MaxPain Chart” title_position=”in”]
