karennma
8,057 posts
msg #82265
- Ignore karennma |
11/2/2009 9:07:37 AM
I'm starting a Max Pain thread for the options because the message I posted last nite regarding max pain is now "mysteriously" missing ... **AGAIN**..
Someone posted info re: predicting "max pain" prices on options contracts based on expiration dates .
My question was .... how would max pain predictions apply to earnings plays, (which do not coincide with expiration dates).
For example, right now we've got THREE weeks till Ops Exp.
So, really ... how relevant are max pain calculations?
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chetron
2,817 posts
msg #82267
- Ignore chetron |
11/2/2009 9:19:27 AM
MAYBE...........
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trendscanner
265 posts
msg #83155
- Ignore trendscanner
modified |
11/16/2009 8:58:14 PM
optionspain.com gives max pain values for free; their subscription fee is for their "Current Pain" calculation, which they claim may be better, since it's based more on recent option activity.
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medowz
59 posts
msg #83168
- Ignore medowz |
11/17/2009 12:34:46 AM
here's something of general reference: http://www.optiontradingpedia.com/option_pain.htm
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trendscanner
265 posts
msg #83175
- Ignore trendscanner |
11/17/2009 7:21:00 AM
Great info, thanks for the link. Their conclusion is that there's no statistical evidence that max pain theory is valid for the market as a whole. It seems possible that there might be some situations where there's some effect.
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trendscanner
265 posts
msg #83303
- Ignore trendscanner |
11/20/2009 8:23:44 PM
The major indices (DIA. SPY, QQQQ) all moved towards their max options pain price over the last few days.
Dec 09 Max Pain prices right now for these 3 indexes are:
DIA - $100
QQQQ - $42
SPY - $101
All 3 of these prices are below current index prices. Doesn't bode well for bullish sentiment,especially the SPY, since Dec max pain is about 9% below its current price. Market could still rally into December though.
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trendscanner
265 posts
msg #83388
- Ignore trendscanner |
11/23/2009 8:38:52 PM
I spent some time this weekend checking and comparing max pain options prices using several different sources. The other sources I found, including Optionistics.com and some stand alone software that uses a direct feed of CBOE data, provided different results for the max pain price for SPY Dec 09 that you get from optionspain.com (which is 102). The other sites indicate max pain for SPY Dec 09 is 106.
On that basis, I wouldn't consider the free data available from optionspain.com data very reliable, although the data from their paid subscription program may be better.
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