Glossary
Max pain
Max pain is the strike price at which all open calls and puts of one expiry would pay their holders the least at settlement. It is computed from open interest alone and is often quoted before bitcoin options expiries, but it is a calculation, not a forecast.
Also called Max pain point, Maximum pain, Max pain price, Options max pain
See also
Max pain is the strike price at which the options of one expiry would pay their holders the least if the market settled there. In crypto the figure is quoted before each large bitcoin expiry, usually from Deribit data, and often read as a level the price is drawn to. It is a calculation on open positions, not a prediction.
A 2020 explainer on Deribit Insights by the trader Cryptarbitrage puts it plainly: max pain is the strike at which option sellers would owe buyers the smallest amount. Nobody has a documented claim to the name. Equity traders used it before bitcoin options existed; researchers who study expiry days speak of pinning.
How max pain is calculated, strike by strike
The only input is open interest, the number of contracts still open at each strike.
- Choose one expiry date and keep only the options that expire on it.
- List every strike that has open calls or open puts.
- Assume settlement at the first strike. A call struck below that price is worth the settlement price minus its strike; a put struck above it is worth its strike minus the settlement price. Multiply by open interest and add it all.
- Repeat for every other strike.
- The strike with the smallest total is max pain.
Open interest changes daily, so the answer does too. Deribit’s explainer says the figure helps mostly close to expiry, and is a limited tool on its own.
A worked example with four strikes
A hypothetical bitcoin chain for one expiry, one contract per BTC, with invented numbers:
| Strike | Open calls | Open puts | Total paid to holders if BTC settles here |
|---|---|---|---|
| $70,000 | 100 | 400 | $5,000,000 |
| $75,000 | 300 | 300 | $2,500,000 |
| $80,000 | 500 | 200 | $3,000,000 |
| $85,000 | 200 | 100 | $7,000,000 |
Settle at $75,000 and only the $70,000 calls pay out: $5,000 on each of 100 contracts, or $500,000. On the put side, the $80,000 puts are worth $5,000 times 200, which is $1,000,000, and the $85,000 puts $10,000 times 100, another $1,000,000. That makes $2.5 million in all, less than at any other strike.
In this chain the answer is $75,000, even though the biggest pile of calls sits at $80,000. The sum weighs every strike at once. It also counts intrinsic value only: premiums paid weeks earlier, and who holds which side, never enter the sum.
Bitcoin max pain at the October 2026 expiry
CryptoTicker had published a max pain level of $78,000 on Thursday 29 October for an expiry it put at about $11 billion. On Friday 30 October, Deribit’s delivery price came in at $78,119.01 at 08:00 UTC, $119 above that level, as our report on the $11 billion expiry showed.
That looks like a bullseye, but proves nothing. Bitcoin had already fallen below the level hours before the settlement window, during a night of forced liquidations. Deribit also settles on a 30-minute time-weighted average of its index, not on one trade, which makes a precise pin harder.
Max pain theory against the pinning research
The popular theory says option sellers push the price toward max pain. Research points elsewhere. In a 2003 paper, Marco Avellaneda and Michael Lipkin modelled how the delta hedging of market makers can hold a stock near a heavily traded strike. Their mechanism rests on dealers hedging long option positions, and open interest does not tell you which side the dealers are on.
Sophie Ni, Neil Pearson and Allen Poteshman, in the Journal of Financial Economics in 2005, found that US stocks with listed options tended to close at strike prices on expiry dates. Their abstract puts the effect at an average of at least 16.5 basis points of return per expiry date, or market value shifts of around $9 billion in aggregate, and blames hedge rebalancing by market makers and manipulation by proprietary traders. CXO Advisory, summarising the research in 2011, judged the distortion too small for individual traders to exploit, and noted that a study of five Indian stocks found no sign of pinning.
Clustering at the nearest strike is not the same as moving to the max pain strike, and we know of no peer-reviewed study of pinning at Deribit’s max pain.
Limits of the max pain point
Open interest does not say who owns the contracts. The buyers-versus-sellers story assumes retail buyers and dealer sellers, yet a covered call or a call spread sits in the same columns. A Thursday figure can be stale by Friday morning, as on 30 October.
Deribit lists daily, weekly, monthly and quarterly options, so a max pain quoted without its date says little.
Max pain: questions readers ask
What is max pain in options?
It is the strike at which all open calls and puts of one expiry would be worth the least in total at settlement. Option holders would collect the smallest sum there, and option sellers would pay the smallest sum. It is computed from open interest alone, so it describes positions, not market expectations.
How accurate is max pain?
It is not built to be accurate, because it is not a forecast. The October 2026 bitcoin expiry settled $119 from the published level, but the price had arrived there through liquidations the night before. One close call, or several, does not show that options caused the move.
Is max pain theory real?
The calculation is real arithmetic. The claim that sellers steer the price toward it is unproven for crypto. Research on US stocks found prices clustering at strikes on expiry dates, which the authors tied to hedging and some manipulation. The effect was small and concerned strikes in general, not the max pain strike.
When do Deribit bitcoin options expire?
Deribit runs daily, weekly, monthly and quarterly expiries. The October 2026 monthly expiry settled on Friday 30 October at 08:00 UTC, with a delivery price taken as a 30-minute average of the Deribit index. Check the exchange’s own contract page for the date of the expiry you follow.
Does max pain apply to ether options?
Yes, the method works for any option chain with open interest by strike, whether bitcoin, ether or a stock. The figure belongs to one expiry on one venue, so ether’s max pain and bitcoin’s on the same date are two separate calculations with different answers.