Cryptocurrency Q&A How do you analyze max pain?

How do you analyze max pain?

SamuraiCourageous SamuraiCourageous Tue Dec 24 2024 | 5 answers 1318
I'm trying to understand how to analyze max pain. Could you explain the process or provide some guidelines on how to approach this analysis? How do you analyze max pain?

5 answers

Federico Federico Thu Dec 26 2024
The dollar values obtained from the multiplication for both puts and calls at each strike price should then be summed up. This provides a total value for each strike price.

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CryptoTitan CryptoTitan Thu Dec 26 2024
This process should be repeated for all in-the-money strike prices. Each strike price has its own unique calculation based on its difference from the stock price and its open interest.

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CryptoQueen CryptoQueen Thu Dec 26 2024
To determine the max pain point in options trading, one needs to follow a specific calculation process.

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Claudio Claudio Thu Dec 26 2024
Initially, the difference between the current stock price and each in-the-money strike price should be calculated. This difference represents the intrinsic value of the option.

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GwanghwamunPride GwanghwamunPride Thu Dec 26 2024
Next, the open interest at each strike price should be multiplied by this difference. Open interest refers to the number of contracts that have not been settled yet.

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