StockFetcher Forums · General Discussion · MAX PAIN/Option Price Calculations<< >>Post Follow-up
6,396 posts
msg #82265
Ignore karennma
11/2/2009 9:07:37 AM

I'm starting a Max Pain thread for the options because the message I posted last nite regarding max pain is now "mysteriously" missing ... **AGAIN**..
Someone posted info re: predicting "max pain" prices on options contracts based on expiration dates .
My question was .... how would max pain predictions apply to earnings plays, (which do not coincide with expiration dates).
For example, right now we've got THREE weeks till Ops Exp.
So, really ... how relevant are max pain calculations?

2,817 posts
msg #82267
Ignore chetron
11/2/2009 9:19:27 AM


265 posts
msg #83155
Ignore trendscanner
11/16/2009 8:58:14 PM gives max pain values for free; their subscription fee is for their "Current Pain" calculation, which they claim may be better, since it's based more on recent option activity.

59 posts
msg #83168
Ignore medowz
11/17/2009 12:34:46 AM

here's something of general reference:

265 posts
msg #83175
Ignore trendscanner
11/17/2009 7:21:00 AM

Great info, thanks for the link. Their conclusion is that there's no statistical evidence that max pain theory is valid for the market as a whole. It seems possible that there might be some situations where there's some effect.

265 posts
msg #83303
Ignore trendscanner
11/20/2009 8:23:44 PM

The major indices (DIA. SPY, QQQQ) all moved towards their max options pain price over the last few days.

Dec 09 Max Pain prices right now for these 3 indexes are:

DIA - $100
QQQQ - $42
SPY - $101

All 3 of these prices are below current index prices. Doesn't bode well for bullish sentiment,especially the SPY, since Dec max pain is about 9% below its current price. Market could still rally into December though.

265 posts
msg #83388
Ignore trendscanner
11/23/2009 8:38:52 PM

I spent some time this weekend checking and comparing max pain options prices using several different sources. The other sources I found, including and some stand alone software that uses a direct feed of CBOE data, provided different results for the max pain price for SPY Dec 09 that you get from (which is 102). The other sites indicate max pain for SPY Dec 09 is 106.

On that basis, I wouldn't consider the free data available from data very reliable, although the data from their paid subscription program may be better.

StockFetcher Forums · General Discussion · MAX PAIN/Option Price Calculations<< >>Post Follow-up

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