[Nitin Bhatia]

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Option Pain Secrets will help an investor or trader to do the option chain analysis more accurately and precisely. In this video, I have shared Option Pain Secrets based on my personal experience and learning. Firstly, if you observe that positions are getting closed in Out of Money contracts on the call side and In the Money contracts on the put side then it implies that Call buyers are closing their positions. Whereas another way means, the PUT buyers are closing their positions.

Secondly, you need to check who is creating the positions at max pain point or at the 2nd & 3rd highest open interest built-ups points. I give more weightage to the positions created or supported by the option writers. Thirdly, you need to check the Futures data also. The data of max pain point and the Futures should be analyzed in sync with each other.

You need to check the skew of the max pain point and it is very Option Pain Secrets. If the 2nd and 3rd highest OI built ups are on the lower side then the probability of market going down is very high and vice versa.

As an investor or trader, you should understand that the whole objective of the max pain point is to cause maximum loss to the options buyers. Therefore, you need to analyze from the perspective i.e. on which point, the option buyers will be at a max loss. At the same time, also keep a tab on the fresh positions. Lastly, Option Pain or max pain point can be used only to check the trend and should not be used independently for trade or investment.

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