Research · counted from the record
Does max pain work?
The theory says Nifty drifts towards max pain as expiry nears. Counted across every Nifty expiry since 2019 at the same distance from expiry as today, it moved towards max pain 74 of 184 (40%) of the time: less often than a coin would.
The claim
Max pain is the expiry level at which option buyers as a group lose the most and sellers pay out the least. Because large sellers have both the money and the motive, the argument runs, the index is pulled towards that level as expiry approaches.
It is repeated daily on trading channels. It is also checkable, because NSE publishes every contract's open interest every day.
How it was counted
Schema rebuilt Nifty's option chain for every trading day since 2019 from NSE's own bhavcopy, and worked out max pain and the walls for the nearest expiry on each day, using only what was known that evening.
Each past expiry is one case. It is read at the same distance from expiry as today (2 sessions left), so like is compared with like, and then set against where Nifty actually closed on expiry day.
"Moved towards" means Nifty's close on expiry day was on the same side of that day's spot as max pain was. Cases where max pain already sat within 0.3% of spot are left out of that count, since there is nowhere to move.
What the record shows, with 2 sessions left
| Reading | Held | Note |
|---|---|---|
| Nifty moved towards max pain | 74 of 184 (40%) | of expiries where max pain sat more than 0.3% from Nifty |
| Nifty finished between the put wall and the call wall | 276 of 400 (69%) | the range was typically 2.8% wide |
| The call wall held (Nifty finished at or below it) | 343 of 400 (86%) | the strike above Nifty with the most call open interest |
| The put wall held (Nifty finished at or above it) | 333 of 400 (83%) | the strike below Nifty with the most put open interest |
| Nifty finished inside the band option prices gave a 68% chance | 270 of 400 (68%) | it should hold about 68% of the time |
| Nifty finished inside the 95% band | 388 of 400 (97%) | it should hold about 95% of the time |
What it means
Max pain has shown no pull. If max pain attracted the index, Nifty would move towards it well over half the time. It did not.
The walls are a different matter. The range between the heaviest put and call strikes within reach has contained the expiry close far more often than not, and each wall on its own has held more often still. Open interest marks where sellers stand; it does not drag the price to their best outcome.
The odds option prices imply have been honest: their 68% band held about as often as it should.
Limits
- The count covers Nifty only. Thinner chains (single stocks, far expiries) may behave differently.
- The figures change with the number of sessions left, and are recounted every evening. Close to expiry, max pain sits nearer the price and matters even less.
- A range that held about 7 times in ten failed about 3 times in ten. It describes how positions stood, not what will happen.
Questions people ask
Does max pain work for Nifty?
Across Nifty expiries since 2019, measured with 2 sessions left, Nifty moved towards max pain 74 of 184 (40%) of the time. That is not a reliable pull.
Is max pain theory accurate?
It is accurate as arithmetic: it correctly identifies where buyers would lose most. The claim that price is drawn there is not supported by Nifty's record.
What works better than max pain?
On the same record, the strikes with the heaviest open interest within reach (the walls) have marked the expiry range more reliably than max pain has marked the close.
How often is this updated?
Every trading evening. Each new expiry adds a case, and the count is redone for the number of sessions left that day.
Keep reading
Research and information, not investment advice. Every figure describes the past: it is what happened, counted, and not a forecast of what will.