Max Pain Theory
Written on March 14, 2008 – 8:32 am | by admin
The Max Pain Theory, which basically indicates where the market makers want the underlying security to end at on options expiration day so as to inflict maximum pain on those holding options, indicates the following about the indexes for the March 2008 expiration:
- DIA - 121 (120)
- SPY - 133 (130)
- IWM - 74 (66.5)
- QQQQ - 45 (42.45)
We are currently 8 days from options expiration. It will be itneresting to see if these levels are where the particular indexes finish at.