Maximum pain theory suggests that upon expiration most options will expire worthless. The max pain price, which corresponds to the strike price with the highest concentration of open options call and put contracts, is the price at which options holders will suffer the most significant financial losses at expiration. Options sellers will try to drive the underlying towards this max pain price so that they can reap maximum reward upon options expiration.
Options skew or volatility skew is a measure of implied volatility across strike prices and can provide insights into market sentiment. In very general terms, skew can be used to interpolate forthcoming market movement. A downward sloping skew suggests potential downside price movement, and conversely an upward slope suggests upside bias and expectations of price increases. A flat volatility skew suggests the market expects little movement, and a smile skew implies a large forthcoming price movement in either direction.
Building the Charts
- Select an Expiration Date. By default, the next expiration data is selected.
- Select whether to combine calls and puts as one graph, show calls and puts as separate graphs, show calls only or puts only.
- Select the number of strikes to consider. Choices include 5 Strikes +/-, Near the Money, 20 Strikes +/-, 50 Strikes +/2, or All.
- Click "Show Chart"
This generates 4 charts on the page: the Max Pain chart, Volume or Open Interest by Strike, Volatility Skew for the Expiration Date, and Max Pain by Contract.
Above the chart, we provide the following information:
- Latest Earnings: The next expected earnings release date, if available. Additionally if a "Next Earnings" date is not available and there is a "Last Earnings" date, we will display that.
- Implied Volatility: The average implied volatility (IV) of the nearest monthly options contract that is 30-days out or more. IV is a forward looking prediction of the likelihood of price change of the underlying asset, with a higher IV signifying that the market expects significant price movement, and a lower IV signifying the market expects the underlying asset price to remain within the current trading range.
- Historic Volatility: The average deviation from the average price over the last 30 days. Historical Volatility is a measurement of how fast the underlying security has been changing in price back in time.
- IV Rank: The current IV compared to the highest and lowest values over the past 1-year. If IV Rank is 100% this means the IV is at its highest level over the past 1-year, and can signify the market is overbought.
- IV Percentile: The percentage of days with IV closing below the current IV value over the prior 1-year. A high IV Percentile means the current IV is at a higher level than for most of the past year. This would occur after a period of significant price movement, and a high IV Percentile can often predict a coming market reversal in price.
Options information is delayed a minimum of 15 minutes, and is updated at least once every 15-minutes through-out the day. The page starts updating for the new trading day at approximately 8:55a CT.
Note:Â 0DTE Friday option expirations are removed from the website at 7:45pm ET each Friday.
Options Overview
Highlights important summary options statistics to provide a forward looking indication of investors' sentiment.
- Implied Volatility: The average implied volatility (IV) of the nearest monthly options contract that is 30-days or more out. IV is a forward looking prediction of the likelihood of price change of the underlying asset, with a higher IV signifying that the market expects significant price movement, and a lower IV signifying the market expects the underlying asset price to remain within the current trading range.
- 30-Day Historical Volatility: The average deviation from the average price over the last 30 days. Historical Volatility is a measurement of how fast the underlying security has been changing in price back in time.
- IV Percentile: The percentage of days with IV closing below the current IV value over the prior 1-year. A high IV Percentile means the current IV is at a higher level than for most of the past year. This would occur after a period of significant price movement, and a high IV Percentile can often predict a coming market reversal in price.
- IV Rank: The current IV compared to the highest and lowest values over the past 1-year. If IV Rank is 100% this means the IV is at its highest level over the past 1-year, and can signify the market is overbought.
- IV High: The highest IV reading over the past 1-year and date it happened.
- IV Low: The lowest IV reading over the past 1-year and date it happened.
- Put/Call Vol Ratio: The total Put/Call volume ratio for all option contracts (across all expiration dates). A high put/call ratio can signify the market is oversold as more traders are buying puts rather than calls, and a low put/call ratio can signify the market is overbought as more traders are buying calls rather than puts.
- Today's Volume: The total volume for all option contracts (across all expiration dates) traded during the current session.
- Volume Avg (30-Day): The average volume for all option contracts (across all expiration dates) for the last 30-days.
- Put/Call OI Ratio: The put/call open interest ratio for all options contracts (across all expiration dates).
- Today's Open Interest: The total open interest for all option contracts (across all expiration dates).
- Open Int (30-Day): The average total open interest for all option contracts (across all expiration dates) for the last 30 days.
