--- title: "Max pain: how it is calculated, and a test on Nifty expiries" description: "How max pain is calculated from open interest, and how it did against a plain forecast on Nifty expiries from dated NSE chains, with the coin comparison." source_url: "https://www.rupeecase.com/learn/path-15/module-15-4-max-pain" --- [Path 15 4 of 13](/learn/path-15/)Max pain: the calculation and a Nifty test[Next 15.5](/learn/path-15/module-15-5-option-chain-liquidity) On Monday 29 Jun 2026, one session before the 30 Jun expiry, the max pain strike of the Nifty chain was 24,000. The index settled the next day at 23,865.75, 134.25 points away. The previous close, 23,946.25, was 80.50 points away. A plain "tomorrow looks like today" beat max pain that day. One day proves nothing, so this lesson scores every Nifty expiry in the school's files that has a chain and a settlement, with the rule fixed before any of them is scored. Every figure comes from NSE end of day files, so nothing here is live and nothing is a view on where the index goes next. 3By the end you can 1. Compute max pain from open interest, strike by strike, and say what the sum assumes. 2. Test a forecast against a plain baseline, with the rule fixed before any scoring. 3. Say what a thin sample can and cannot show, using the coin comparison. Watch in the terminal: how closely did two lines move together? A short tutorial on sample data. ## The idea, plainly Max pain is a sum over the chain. Pick a level where the index might settle. At that level every option in the money pays its holder the distance between the level and the strike. Multiply by open interest, add up over all the calls and puts, and you have the total the writers would pay the buyers. Do it for every level. The level with the smallest total is max pain. The name says buyers feel the pain, since they collect least there. On a real chain open interest is in units, so one point of payout on one unit is one rupee, and the totals run into crores of rupees. | Index settles at | Calls pay | Puts pay | Total | | --- | --- | --- | --- | | 8 | 0 | 8 | 8 | | 9 | 3 | 3 | 6 | | 10 | 8 | 0 | 8 | * Writers can steer the index to their level. * All open interest is buyers against writers, when much of it is hedges and spreads, as the [open interest module](/learn/path-15/module-15-2-open-interest-on-the-option-chain) explains. * The snapshot stays true until expiry, when open interest keeps changing. Read 2 more paragraphs, 105 words Try it on a toy chain, not market data: three strikes called 8, 9 and 10, with open interest in lots. Calls at 8: 3 lots and at 9: 2 lots. Puts at 9: 2 lots and at 10: 3 lots. A payout of one is one point on one lot. The total is lowest at 9, so 9 is max pain. The recipe uses open interest and nothing else: no prices, no time left, no volatility. The story behind it says writers want to pay least, so the index drifts there. That story assumes three things, and none of them comes from the sum. ## Worked example: ten Nifty expiries Start with one chain. On 10 Jun 2026 the weekly expiring 16 Jun had its open interest as below. The sum over it gives the payout curve under it, with its lowest bar at 23,300. Open interest by strike is the only input to max pain Nifty chain of 10 Jun 2026 for the 16 Jun weekly expiry, at every hundred point strike, with the day before marked. The index closed at 23,214.95 that day. Source: NSE end of day data, computed by RupeeCase. As of 10 Jun 2026. The payout to buyers is lowest at the 23,300 strike, which is max pain Total payout to call and put buyers if the index settled at each level, from open interest in units on 10 Jun 2026. The lowest bar is max pain. Source: NSE end of day data, computed by RupeeCase. As of 10 Jun 2026. The index then settled at 23,989.15 on 16 Jun. Max pain was 689.15 points away and the index close of 10 Jun was 774.20 away. Max pain was nearer, and still far. * **Chain.** The last chain in the files before each expiry. * **Baseline.** The previous close, the index close on the chain date. * **Score.** Which of the two was nearer to the settlement. Ties are counted apart. * **Settlement.** The index close on expiry day, which is the rule for every expiry here. All of them fall before 3 Aug 2026, when a closing auction began to set that close. SEBI's circular of 15 Oct 2026 changes the method from 7 Dec 2026, so later expiries need a fresh test. * **Split.** Chains up to six sessions out, and chains further out, kept apart. | Expiry | Max pain | Previous close | Settled at | | --- | --- | --- | --- | | 3 Feb 2026 | 25,050 | 25,088.40 | 25,727.55 | | 10 Feb 2026 | 25,100 | 25,088.40 | 25,935.15 | | 16 Jun 2026 | 23,300 | 23,214.95 | 23,989.15 | | 23 Jun 2026 | 23,900 | 23,989.15 | 23,824.10 | | 30 Jun 2026 | 24,000 | 23,946.25 | 23,865.75 | | 7 Jul 2026 | 24,000 | 23,946.25 | 24,398.70 | Max pain was nearer on four of six near expiries, a score a fair coin matches about one time in three Six expiries with a chain up to six sessions out. Above zero, max pain was nearer the settlement than the previous close. The sample is too small to count. Source: NSE end of day data, computed by RupeeCase. As of 7 Jul 2026. Read 4 more paragraphs, 267 words Now the test. A forecast has to beat a plain one, because the plain one costs nothing to produce. If max pain cannot beat it, the chain adds no information. So the rule is fixed first. Max pain was nearer on four of six, the previous close on two. Count the misses as well as the hits. Four or more of six is what a fair coin gives about one time in three. Further out, with four expiries, the split was two and two. On 2 Feb 2026 the 30 Mar chain had max pain at 26,000, and the index settled 3,668.60 points under it. Seven earlier expiries cannot be scored at all, because the index close file starts on 1 Jul 2025. Size matters as much as count. Max pain's four wins were by 11.60, 85.05, 89.15 and 53.75 points. The previous close's two wins were by 38.40 and 53.75. Small margins. On the six near expiries, max pain missed the settlement by 468 points and the previous close by 493. The gap between them, 25 points, is 0.1% of the index. In three of its four wins it was still hundreds of points off. Academic work on US stocks finds that closing prices cluster at option strikes on expiry dates. It ties the effect to hedging by option market makers and to trading by firms' own desks. That is about strikes in general, on single stocks. It is not about the one strike a max pain sum picks, and it is not a test of max pain on an index. ## The common mistake The claim: Max pain is where the index gets pulled on expiry, so the chain tells you where it will close. A calculation that looks like a mechanism feels like a forecast. Here it did not beat "tomorrow looks like today" by a margin a coin could not match, and in three of its four wins it was still hundreds of points off. The verdict is not shown, which is not the same as disproved. What would change it: thirty or more expiries, the same rule, and a clear win over the previous close. The test starts again for expiries from 7 Dec 2026. The [question page](/learn/questions/does-max-pain-work) gives the short answer. ## Key takeaways * Max pain is the level where option buyers would collect least, from open interest alone. * The sum uses no prices, no time left and no volatility. * A forecast has to beat a plain one: the previous close. * Max pain beat the previous close on four of six near expiries. * On average both missed the settlement by almost the same distance. * The settlement method changes on 7 Dec 2026, so the test starts again. 2 terms this section turns on From the module glossary; every term is in the Learn glossary too. Source: Module 15.4, Max pain: the calculation and a Nifty test. **Before you trade.** Derivatives trading carries a high risk of loss. SEBI's study "Profitability of Individual Traders in the Equity Derivatives Segment (FY25 to FY26)" (August 2026) found that 87.7% of individual traders in equity F&O made net losses in FY26, with aggregate net losses of Rs 91,685 crore. [Read the SEBI study](https://www.sebi.gov.in/reports-and-statistics/research/aug-2026/study-profitability-of-individual-traders-in-the-equity-derivatives-segment-fy25-fy26-_103835.html) What does Max pain: the calculation and a Nifty test cover?A sum over the chain that picks one strike. How it works, and a test against the plainest forecast there is. It works through The idea, plainly, Worked example: ten Nifty expiries, The common mistake, Key takeaways. It is module 15.4 of Path 15, Option Chain and Data, about 7 minutes of reading, free. TTry it ## Max pain checker, on the same example. The calculation, and how it compares with a plain forecast. Dated NSE end of day data, nothing live, no orders. **Max pain checker**, Nifty, 10 Jun 2026, 16 Jun 2026 expiry. [Open the max pain checker](/learn/tools/max-pain-checker?chain=NIFTY_2026-06-10_2026-06-16) AF&O on RupeeCase ## Hedging only, in development F&O at RupeeCase will do one job: protect a portfolio you already own, by a rule published before it runs. No speculation, no naked option selling, no leveraged bets. It is not available yet. [How hedging will work](/hedging)[Sign up for RupeeCase](https://invest.rupeecase.com/signup) [No hedgeFalls with the marketWith a putA floor, for a premiumIllustration with made up numbers, not a product and not a recommendation.](/hedging) QQuick check ## 10 questions, 7 to pass. Each attempt draws 10 of the 15 questions in this module's bank, and a retake draws a fresh set. A pass gives this module's Certificate of Completion. Your result stays on this device and counts towards the Path 15 certificate. 7 of 10 correct passes module 15.4 Every answer is explained when you check; a retake is always free. Source: RupeeCase Learn quiz rules (70% to pass). Passed ### Certificate ID Download PNGPrint or save as PDF[Check the ID](/learn/certificates/verify) Self paced and unproctored. A record of completing free education by RupeeCase; not a NISM certificate and not endorsed by NISM, NSE, BSE or SEBI. It qualifies no one to deal, advise or publish research. CCheck yourself ## Path 15 so far. Your quick check results on this device, stop by stop. Stop 4 of 13 on Path 15 Option Chain and Data: every live stop, this module ringed. Source: RupeeCase Learn, Path 15. 1. [15.1Reading the NSE option chain, column by columnNot yet](/learn/path-15/module-15-1-reading-the-nse-option-chain) 2. [15.2OI and change in OI on the chain: what they can and cannot tell youNot yet](/learn/path-15/module-15-2-open-interest-on-the-option-chain) 3. [15.3Put call ratio: definitions and what the evidence saysNot yet](/learn/path-15/module-15-3-put-call-ratio) 4. [15.4Max pain: the calculation and a Nifty testNot yet](/learn/path-15/module-15-4-max-pain#quiz) 5. [15.5Liquidity in the chain: spreads, volume and tradable strikesNot yet](/learn/path-15/module-15-5-option-chain-liquidity) 6. [15.6Participant wise OI and FII derivatives data, read honestlyNot yet](/learn/path-15/module-15-6-participant-wise-open-interest) 7. [15.7Expected move from the straddle and from IVNot yet](/learn/path-15/module-15-7-expected-move) 8. [15.8Who is on the other side in IndiaNot yet](/learn/path-15/module-15-8-who-is-on-the-other-side) 9. [15.9Gamma exposure: the computation and its assumptionsNot yet](/learn/path-15/module-15-9-gamma-exposure-gex) 10. [15.10Zero gamma, call wall and put wallNot yet](/learn/path-15/module-15-10-zero-gamma-and-walls) 11. [15.11Pinning and max OI strikes: the evidenceNot yet](/learn/path-15/module-15-11-pinning-and-max-oi-strikes) 12. [15.12Vanna and charm flows around expiries and eventsNot yet](/learn/path-15/module-15-12-vanna-and-charm-flows) 13. [15.13An Indian positioning model and its limitsNot yet](/learn/path-15/module-15-13-indian-positioning-model) 14. [TPath test, 30 questionsNot yet](/learn/path-15/module-15-13-indian-positioning-model#pathTestSection) Path 15 in reading time: 119 minutes over 13 modules Minutes of reading per module, this one in amber. Source: RupeeCase Learn, Path 15. Explore next ## Put the module to work. * [Free module 14.6Expiry and settlement: cash, physical, exercise and STT8 min read](/learn/path-14/module-14-6-expiry-and-settlement) * [ToolOption payoff builderLegs on a dated Nifty chain, breakevens and charges](/learn/tools/payoff-builder) * [Free module 15.2OI and change in OI on the chain: what they can and cannot tell you8 min read](/learn/path-15/module-15-2-open-interest-on-the-option-chain) * [Free module 15.3Put call ratio: definitions and what the evidence says7 min read](/learn/path-15/module-15-3-put-call-ratio) * [Free module 15.11Pinning and max OI strikes: the evidence10 min read](/learn/path-15/module-15-11-pinning-and-max-oi-strikes) * [QuestionWhat is max pain, and does max pain theory work?A short answer with a dated chart](/learn/questions/does-max-pain-work) Community ## Join my WhatsApp group. Scan the code, fillFill one short form, and join my WhatsApp group. Slides, sources, factsheets and the rebalance logs live there, and members join a daily Google Meet with me. New to RupeeCase? [Getting started](/getting-started) [See the terminal](/terminal) [Sign up for RupeeCase](https://invest.rupeecase.com/signup) [Join the WhatsApp group](https://forms.gle/C6HMtM1Z2GfeocQV7) [One form, one group](https://forms.gle/C6HMtM1Z2GfeocQV7)Scan with your phone camera SSources ## Go to the source. 5 sources, NSE the most cited The publisher of each source listed below. Source: Module 15.4 source list. 1. [SEBI, master circular on exchange traded derivatives: the index settlement price is the index close on expiry day](https://www.sebi.gov.in/sebi_data/commondocs/dec-2024/RE_Chapter%205%20-%20Exchange%20Traded%20Derivatives%20FINAL_1_p.pdf) SEBI 2. [SEBI, circular of 15 Oct 2026 on the closing auction session and the settlement method for derivatives, from 7 Dec 2026](https://www.sebi.gov.in/legal/circulars/oct-2026/review-of-certain-aspects-of-the-closing-auction-session-market-timings-and-settlement-methodology-for-derivatives-contracts_105293.html) SEBI 3. [NSE, equity derivatives contract specifications](https://www.nseindia.com/static/products-services/equity-derivatives-contract-specifications) NSE 4. [NSE, option chain (Nifty 50 index options)](https://www.nseindia.com/option-chain) NSE 5. [Ni, Pearson and Poteshman (2005), Stock price clustering on option expiration dates, Journal of Financial Economics](https://ideas.repec.org/a/eee/jfinec/v78y2005i1p49-87.html) Paper GTerms ## 4 terms from this module. Max painThe settlement level at which the total payout to option buyers, worked out from open interest alone, is smallest. Previous closeThe index close on the chain date. Used here as the plainest forecast: the index stays where it closed. Settlement priceThe price at which an index contract is settled at expiry. For the expiries tested here it is the index close on expiry day. PinningThe tendency of a price to settle near a strike on expiry day. Studied for US stocks, it is a different claim from max pain. [All 230 terms in the glossary](/learn/glossary) [Question people askWhat is max pain, and does max pain theory work?A short answer with a dated chart](/learn/questions/does-max-pain-work)[Related module15.2 OI and change in OI on the chain: what they can and cannot tell you8 min, Beginner](/learn/path-15/module-15-2-open-interest-on-the-option-chain)[Related module15.3 Put call ratio: definitions and what the evidence says7 min, Beginner](/learn/path-15/module-15-3-put-call-ratio)[Pillar guideDerivatives and Quant115 modules across paths 12 to 19](/learn/derivatives) Education only, not investment advice, a research report or a recommendation to buy, sell or hold any security. RupeeCase (QC Alpha Technologies Pvt Ltd) is not registered with SEBI as an investment adviser or research analyst. Contracts and prices shown are for illustration only, come from NSE end of day files at least 30 days old, and are not recommendatory. Derivatives trading carries a high risk of loss.