Option Strategy: Max Pain Theory - Unofficed

Options Max Pain Theory suggests, “On option expiration day, the underlying stock price often moves toward a point that brings maximum loss to option buyers.” Options trading is a zero-sum game between Option Buyers and Sellers. Most options (both calls and puts) expire worthless at the Expiration date. It was first proven by John Summa […]…

Stock Option Max Pain

Where do you get started? In a nutshell, max pain theory says that the option sellers (called writers) have stock on hand to fulfill the options if they are exercised. These stock positions are maintained to minimize risk to the sellers, and this maintenance affects the stock price. So, ……