What is max pain in crypto options?

Max pain is the strike price at which the total intrinsic value of all outstanding options is minimized — the price where the most contracts expire worthless. It acts as a short-term price magnet near expiry because market makers who sold those options are incentivized to hedge toward that level.

How is max pain calculated?

For every potential expiry strike price, sum the intrinsic value of all in-the-money calls and puts across all strikes. The strike that produces the lowest total intrinsic value is the max pain level. Sharpe recalculates this in real time from Deribit open interest across all active BTC and ETH expiries.

Does max pain always work?

No. Max pain is most predictive in the final 24–48 hours before expiry and when implied volatility is low. During high-volatility events (FOMC, ETF approval, geopolitical shocks), price can blow through max pain entirely because dealer hedging is overwhelmed by directional flow. Use max pain as one input among several, not a standalone signal.

Why do market makers push price toward max pain?

Market makers who sold the options are short gamma — they buy as price rises and sell as it falls to stay delta-neutral. Near expiry, the hedging flow intensifies because option gamma peaks for near-the-money strikes. The aggregate hedging behavior pulls spot toward the strike with the maximum concentrated short-gamma exposure, which is close to (though not always exactly) the max pain level.

Where can I see the live BTC and ETH max pain?

Sharpe's /options/bitcoin and /options/ethereum pages show live max pain for every active expiry alongside OI distribution, put/call ratios, and Greeks. Data refreshes every 5 minutes from Deribit.

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Max Pain — Crypto Options

Max Pain — Crypto Options