A technical analysis tool that is used to determine the point at which the maximum loss on an option contract would take place. It is based on the theory (known as maximum pain theory) that 90 percent of all option contracts expire unexercised, with option holders incurring certain losses.

Simply put, max option pain defines the price point at which option contracts expire worthless. In the option market, the financial interaction between option buyers and sellers is a zero-sum game. On expiration days, the underlying stock price often moves toward a price point that brings maximum loss to option buyers. This specific price, measured based on all outstanding options in the market, is referred to as option pain.