Narration: AI voice.
One number on one page
Max pain. One strike per expiration, and a lot of claims attached to it. Here's a published one, as captured on October 15, 2026. For the October 15, 2026 SPX expiration, max pain is 7,745. Computed from open interest at the October 14, 2026 close. The arithmetic behind that number is simple and fully reproducible. The story attached to it is a different thing. This video separates the two.
Reading the tile
Here's the tile. The header carries its own snapshot time. First row: max pain, 7,745, and the expiration it belongs to. Second row: SPX spot at the snapshot. Third row: the gap between them. Max pain sat 3 points below spot. That gap describes one snapshot. It says nothing about where the index settles. Last row: 239 strikes went into the calculation. Under the tile, one line worth reading twice. Open interest shows how many contracts are outstanding. Never whether they're hedged, or part of a spread. Keep that in mind. It matters later.
The definition
Definition. Max pain, also called the max pain point, is the strike where the options on one expiration would pay their holders the least in total, if the underlying settled there. Every contract has a holder and a writer. At expiration, an in-the-money call pays the amount the settlement is above the strike. An in-the-money put pays the amount the strike is above the settlement. Out of the money pays nothing. Writers pay that total. So the same level is where writers as a group pay out the least. That's where the name comes from.
Computing it on a generic chain
Here's a generic chain for one expiration. Five strikes, K minus two up to K plus two. Put open interest is heavy below. Call open interest is heavy above. Spot sits between K and K plus one. The method: pretend the index settles at each strike in turn, and add up what every option would pay. Start at K minus two. No call is in the money. Every put above it is. Big total. Move to K minus one. The puts above still pay, one step less each. The calls at K minus two pay a little. Smaller total. Now K. The calls below and the puts above each pay a step or two. The smallest total so far. K plus one. The calls below pay more now, and only the small puts above pay. The total climbs. K plus two. Every call below pays, including the heavy calls at K plus one. Big total again. Join the totals and you get a valley. Between two neighbouring strikes the total changes in a straight line. So the lowest point always lands on a strike, and testing strikes is enough. The bottom of the valley is max pain. Here it sits at K. Spot sits somewhere else. Nothing in the arithmetic says it has to be at the bottom.
The same valley on the real chain
Now the same arithmetic on the real chain. Scroll down to the calculator. Every bar is the total intrinsic value paid if SPX settled at that strike. The amber bar is the bottom: 7,745. Look at the shape too. Near the bottom, several strikes sit at almost the same height. A shallow floor like that means a small change in open interest can move the minimum. The caption under the chart names the minimum modeled payout: 174.7 million dollars.
What it uses, and what it doesn't
Two things follow. First, it uses open interest by strike, and the strikes. One expiration at a time. Each expiration has its own open interest and its own max pain, so a figure without an expiration date is incomplete. It doesn't use option prices, implied volatility or Greeks. And it knows nothing about who holds which side. So anyone with open interest by strike can reproduce it exactly. For SPX there's a further split. SquawkFlow's OPEX month pages show max pain separately for the AM-settled SPX root, the PM-settled SPXW root, and both combined.
A shortcut that gives a different number
Some explainers define max pain as the strike with the highest combined call and put open interest. That's a different number. It ignores how far each position sits from the settlement. A big block far out of the money counts as much as the same size at the money. On this chain, that rule picks K plus two. The payout rule picks K. The two can agree. Nothing makes them agree.
The pinning story, and its condition
Now the story. The theory says the underlying drifts toward max pain as expiration approaches. A pin. The mechanism people point to is hedging. There is real evidence that prices cluster at strikes on expiration dates. A 2005 Journal of Financial Economics study by Ni, Pearson and Poteshman found it in US stocks. It named two contributors: hedge rebalancing by option market makers, and stock price manipulation by firm proprietary traders. But that's a result about stocks clustering at strikes. It isn't a test of max pain. And the hedging story only works one way round. Price dips below K. A desk long gamma adds the underlying. A desk short gamma sheds it. Price rises above K. The long-gamma desk sheds. The short-gamma desk adds. So long gamma leans against the move. Short gamma pushes with it. At the strike, long gamma can pin. Short gamma repels. A short-gamma strike isn't a weak pin. It's a repellent. Open interest tells you a contract exists. It never tells you which side the hedger is on. So the condition the whole idea rests on is assumed, not observed.
When the idea breaks
Even with the right sign, a pin needs more. The open interest has to be large next to what trades in the underlying. Price has to be near the strike already. Pinning describes the end of a journey, not the journey. A single dominant strike pins harder than the same open interest spread across five. And news overrides it. A strong catalyst near expiration, earnings or a macro release, can swamp whatever the open interest implies. As a reference point, max pain is fine. As a predictor on its own, it isn't reliable.
Reading it without overreading it
So here's how to read it. One: check the expiration, and the date of the open interest behind it. Two: look at the shape, not just the bottom. A flat curve makes a fragile minimum. Three: compare it with the official settlement value, not an intraday level. Four: if you want to know whether pinning happens, log how far settlement landed from max pain, expiration after expiration, and count. That's a number with a sample size. A story about the Fridays it worked is not.
Wrap
Max pain is a tidy summary of where open interest sits. It is not a forecast. Read it with its expiration and its open interest date. More on pinning and the long-gamma condition, with sources, on the glossary page linked with this video. Education, not advice.
Full write-up with sources: /learn/pin-risk-options-expiration
Educational content, not investment advice.
Levels shown are as captured on 2026-10-15 15:58 ET; they are not current.