What it is. Max pain is the strike price at which the aggregate dollar value of expiring in-the-money calls and puts is minimized — i.e. the strike where option buyers collectively lose the most and option sellers (dealers) keep the most premium. It's calculated by summing open-interest-weighted intrinsic value across all strikes for a given expiry.
How to read it. Compare current spot to the max-pain strike. Historically, into weekly and especially monthly expiration, SPX and single names with liquid options tend to gravitate toward max pain — not because dealers 'push' price there, but because delta-hedging flows around large open interest concentrations create magnetism.
Why it matters. Max pain is a rough pin target for the week or month. It's most reliable on days with heavy near-dated open interest (weekly expiries on SPX, monthlies on mega-caps like AAPL/NVDA/TSLA). Combined with the gamma flip and put/call walls, max pain helps time short-dated theta trades and identify likely 0DTE ranges.