Reading Max Pain
Inspect the selected expiry’s minimum-payout strike, payout distribution and available max-pain history.
The calculated minimum is not a forecast or a requirement that price converges to that strike.
- Standard max pain minimises summed call and put intrinsic payout across the tested settlement strikes using observed OI.
- Inspect the payout distribution, underlying price and available historical observations together.
- Keep the modified distance-weighted calculation separate from the standard result.
