# Max Pain

*Derivatives & Options — Finicade finance glossary*

Max pain is the strike at which the largest dollar value of options expires worthless — the price that would hurt option buyers most. The folk theory says prices gravitate there before expiry. There's a real mechanism behind part of it: dealers hedging large gamma positions buy weakness and sell strength near heavily-traded strikes, pinning the price. The manipulation story usually attached to it is far weaker than the hedging-flow story.

**Also known as:** max pain theory, pin risk

**Related terms:** [Open Interest](https://finicade.com/glossary/open-interest), [Expiration](https://finicade.com/glossary/expiration), [Options Chain](https://finicade.com/glossary/options-chain), [Delta Hedging](https://finicade.com/glossary/delta-hedging), [Gamma](https://finicade.com/glossary/gamma)

Source: https://finicade.com/glossary/max-pain