What is Option Pain®?
In the option market, wealth transfer between option buyers and sellers is a
zero-sum game. On option expiration days, the underlying stock price often
moves toward a point that brings maximum loss to option buyers. This specific
price, calculated based on all outstanding options in the market, is called
Option Pain®. Option Pain® is a proxy for the stock
price manipulation target by the option selling group.
How Should I Read the Option Total Chart?
Option Pain® point is represented by the lowest bar in
the chart. At this price, all the options in the market have the smallest
How Should I Read the Call and Put Chart?
This chart plots the total value of calls (green)
and puts (pink) separately. At a specific
price point, if the call value is greater than the put value, the stock price
may be manipulated below the strike price, making all call options worthless.
If the put value is larger than the call value, the stock price may stop above
the strike and make the put options worthless.
Does Option Pain® Theory Really Work?
It has been observed over and over again that, near option expiration, option
buyers suffer significant losses. According to a New York Times article
, it is likely that option sellers, including firm proprietary traders,
"manipulate stock prices by selling large numbers of shares whose prices
they wanted to keep from rising and by buying other shares whose prices they
wanted to support."
What Should I Do if I Hold In-The-Money Options Near Expiration?
You may want to sell the in-the-money option, call or put, one week before the
final option expiration Friday. If you hold these options to the last moment,
very likely you will see your options become worthless.
What Is the Small "®" Sign following Option Pain®?
Option Pain® is one of our trademarks/servicemarks registered at the
United States Patent and Trademark Office. It is very important
that any other company or website do not use our trademark Option Pain® without
Our Company is currently taking legal
actions against another company for trademark violation.
Can I Copy Your Statements or Produce Charts based on Your Site?
This website and its content is copyright
of our company - © Optionpain LLC 2008-2012. All rights reserved. All
contents of this website including statements and charts are registered matter
at the U.S. Copyright office. You may not, except with our express written
permission, distribute or commercially exploit the content. Nor may you
transmit it or store it in any other website or other form of electronic
We will take
legal actions against anyone infringes our copyright (that is, without our
permission, you copy, market, display, or produces a derivative work based on
our original work). Anyone who violates our intelligent rights will be
asked to pay attorney fees, court costs, and other damages.