Close Menu
    Options

    NVDA max-pain of $100 not making sense

    for week ending 9/20 it's at $100 or $105. stock is already at $118.
    can someone explain if MMs and options sellers are really getting toasted? how can they let it happen? they are the majority in this game.

    I understand the stock price doesn't and hasn't been correlating with max pain at all.
    but max pain is max pain i.e option sellers are loosing it since stock price is at $118.
    anyone with more knowledge than me here please? Thanks in advance

    NVDA max-pain of $100 not making sense
    byu/chai2048 inoptions



    Posted by chai2048

    View 11 Comments

    11 Comments

    3. Whythehellnot_wecan on

      MM are not degenerate regarded gamblers they are hedged. Right or wrong I think of it like a book maker. They off load one sided bets and make money on the juice, they are not gambling.

    5. meh_69420 on

      Max pain only matters when the money is close. If it’s that far itm already, they are already Delta hedged neutral on it, so it’s irrelevant unless price drops significantly and they are taking hedges off

    6. thatstheharshtruth on

      Max pain doesn’t predict anything my dude. How about you stop with the astrology and actually try to come up with a consistently profitable strategy? Thank me later.

    7. cat-from-the-future on

      You do realize their transactions don’t ever stop. Max pain is at 100? No problem they’ll keep selling you options at 130 and 140 strike and every time those options go in the money they will automatically fully hedge and offset losses as the stock keeps going up.

    8. illcrx on

      Don’t try to make sense of things that you can not possibly understand, who’s max pain? There are thousands of participants so whos pain?

      Just trade.

    9. jupitersaturn on

      Institutions that write options are delta-hedged such that underlying drift isn’t a problem. They have some jump risk, but this isn’t that.

    10. chenlukai on

      1) No, options sellers are not losing it. You can be long or short on the underlying if you sell an option. Same for buying an option.

      2) MMs are not getting toasted. They are market neutral.

      3) Max pain means there is a tendency for the stock to drift towards that price. That’s it. That by itself doesn’t mean anything if you look at it in a vacuum. Just like while there is a tendency for stock prices to drift upwards, there are going to be red days and green days for stocks and you don’t go yelling that there shouldn’t be red days cos’ stocks are inclined to drift upwards.

    Leave A Reply
    Share via