diagonal
spacer

Max Pain Calculation

By Johns Wu on Feb 16, 2006

Tomorrow is options expiration Friday, so it's a good time to learn about "max pain" calculations.

"Max Pain is a term used to describe the specific price that a stock can close at on options expiration day in order to lead to the most dollars lost for those who bought options on that stock over the past months. "Everyone loses=Max Pain". Not coincidentally, this price point also leads to the most profit for those who SOLD the options over the last months (usually institutions, market makers, etc.)"

Read the rest of the article at DayTradeTeam.

spacer
This entry was posted on Thursday, February 16th, 2006 at 9:29 pm and is filed under Market News. You can skip to the end and leave a response. Pinging is currently not allowed.


2 Responses to “Max Pain Calculation”


By Space4u2go on February 17th, 2006 at 7:46 am

Chk out IBM and AAPL…. might be a good shorting possibility as both have formed SHS pattern…. and due to options expiration aapl is will be closing near 70 to fall in next week back…

By Anonymous on February 20th, 2006 at 11:03 pm

I didn’t realized about “Max Pain” term. Until that RHEO thumbled down at Feb 4. That’s hurt. Especially since I am 12 hrs different. Just like “getting killed” while I was sleeping.
Anyway I apreciate your article.

Leave a Comment


Comments: