Metric reference

Options Max Pain Explained — What It Is and What It Is Not

Learn how Bitcoin and Ethereum options max pain is calculated from open interest, why it is not a price target, and how to read it beside strikes, expiry size and implied range.

Read max pain live on Bitcoin options, merged across Deribit, OKX, Bybit and Binance.

Open live data

What max pain actually measures

Max pain is the settlement price at which option holders, taken together, would collect the least intrinsic value. For each listed strike treated as a possible settlement, the payout of every call and put is summed and weighted by open interest; the strike with the smallest total is max pain.

It is a description of where open interest sits, not a measurement of anyone’s intent. Every option has a buyer and a seller, open interest does not say which side is the customer, and the calculation ignores the premium that was paid to open the positions.

The idea that price gravitates to max pain rests on hedging: large open interest close to spot shapes how dealers adjust hedges as settlement approaches. That effect is real on some heavy expiries and absent on many others, so max pain is most useful as a map of the strikes, read with how much open interest the expiry holds.

Core relationship

Max pain = argmin over strikes S of Σ OI × max(0, S − K) for calls + Σ OI × max(0, K − S) for puts

The data contract

Before comparing two values, make sure they answer the same question.

Open interest must be in the same unit on every venue — coins, not contracts — before it is summed; venues publish different contract sizes.
The candidate settlements are the listed strikes, so the answer is always a strike and ties need a rule; Basis gives ties to the lower strike.
Max pain is per expiry. A figure for all expiries together mixes dates that settle weeks apart and answers no single question.
Which venues are included changes the answer. A one-venue max pain and a merged one can differ by a strike or more.

Read it in combinations

Observed together	Plausible interpretation	What would contradict it
Heavy quarterly expiry · max pain near the forward · large OI either side	Settlement-week hedging may lean price towards the dense strikes as expiry approaches.	A directional catalyst or a volatility expansion moves price through the dense strikes without pausing.
Small weekly expiry · max pain far from spot	Little open interest settles, so the figure has almost no mechanical relevance.	The expiry holds an unusually large share of total open interest for its date, which the expiry chips would show.
Max pain inside the implied one-sigma range · negative dealer gamma	Hedging is modelled to amplify moves, which works against any pinning effect.	Open interest rotates so that modelled gamma turns positive around the dense strikes before settlement.
Max pain moves between refreshes · open interest rotating	Positions are being rolled or closed, and the stable reading is the strike distribution, not the single strike.	The distribution is unchanged and only one small strike’s open interest moved the answer.

A reproducible workflow

01
Choose one expiry
Read max pain for a single settlement date, and note how much of total open interest that date holds before giving the number any weight.
02
Look at the strikes behind it
Check whether max pain sits between two walls of open interest or next to one dominant strike. The chart explains the number; the number alone does not.
03
Compare with the implied range
A max pain outside the implied one-standard-deviation move for the date is unlikely to matter. One close to the forward on a heavy expiry deserves attention.
04
Check modelled gamma
Positive dealer gamma around the dense strikes is the condition under which pinning is most often discussed; negative gamma argues against it.

Common interpretation errors

Treating max pain as a price target or a prediction of where settlement will be.
Quoting max pain for all expiries combined as if it were one date.
Ignoring how little open interest a weekly expiry holds.
Summing open interest in contracts across venues with different contract sizes.

Questions

Does price move to max pain before expiry?+

Sometimes, on heavy expiries with a lot of open interest near spot, and often not at all. There is no mechanism that forces it; the effect, where it appears, comes from hedging around dense strikes and is easily overwhelmed by directional flow.

Why is max pain always a strike?+

Because the calculation only tests listed strikes as candidate settlement prices. Between two strikes the total payout changes linearly, so the minimum always falls on a strike, and a tie between strikes needs a rule to pick one.

Is max pain the same on every website?+

No. It depends on which venues are included, the snapshot time and whether open interest was converted to the same unit. A merged figure across Deribit, OKX, Bybit and Binance can differ from a Deribit-only figure for the same expiry.

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