The strike that minimises in-the-money OI at settlement. Folklore, not forecast — but a great map of dealer exposure. Auto-refreshes every 120s.
Max pain is the strike price at which the greatest dollar value of outstanding option contracts expires worthless. It's the settlement price that hurts the option-buying crowd most and benefits option writers most.
Market makers who are short gamma have an incentive to pin price toward the max pain strike into expiry via delta hedging. The effect is strongest on large-notional BTC and ETH Deribit expiries. Max pain is a gravitational level, not a prediction.
For every strike, SkynetX computes the intrinsic value of all open calls and puts at that strike. The strike that minimises the aggregate intrinsic value across the full chain is the max pain. Calculated per expiry, per underlying (BTC, ETH).
SkynetX computes max pain per expiry for BTC and ETH from the live Deribit options chain, updated every 2 minutes.
The ingestion worker writes max-pain per expiry to sentiment_index each cycle; once you have a couple of snapshots the page populates.
Max pain is the options settlement price at which the greatest dollar value of outstanding contracts expires worthless. It's named for the pain it inflicts on optionbuyers: if price pins to the max-pain strike at expiry, holders of puts and calls alike lose the maximum aggregate premium they paid, and the option-writing desks collect it. On Deribit, the dominant venue for BTC and ETH options, the daily, weekly and monthly max-pain levels are closely watched — not because price always goes there, but because market makers who are short gamma have a delta-hedging incentive to push it there.
The calculation is mechanical: for every listed strike in the chain, sum the intrinsic value of all open calls (max(spot − strike, 0) × open interest) and all open puts (max(strike − spot, 0) × open interest). The strike that minimises that aggregate intrinsic value is the max pain. SkynetX recomputes this every 2 minutes against the live Deribit chain per expiry, which is why you see a distinct pin for the weekly, the end-of-month, and each quarterly roll above.
Use max pain as a gravitational level, not a prediction. It works best on large-notional expiries with concentrated OI, and it fails spectacularly during trending tape where spot runs away from any pin. Cross-reference the BTC options chain for the PCR and volume breakdown, and the futures open interest to see whether the derivatives crowd has the firepower to override dealer hedging. For a fuller options picture, keep the funding rate tab open alongside — max pain is cleanest when perps are calm.