Definition. Options Max Pain is the settlement price at expiry that minimizes the total intrinsic value (payout) of all outstanding options (calls and puts) for a given maturity, based on current open interest.

Technical. For each maturity, candidate settlement prices are evaluated and the aggregate intrinsic value across all strikes is computed, the price with the lowest total payout is the max pain level. Calculations use real-time open interest and update every 10 minutes.

Interpretation. Traders use this as a positioning-based reference for potential pinning near expiration, though it is heuristic and depends on how open interest is held and hedged.