Manually calculating, max, pain, maximum, pain.com.
Underlying price for which we want to calculate the profit or loss. Likewise if PCR indicates extreme bullishness, then traders expect markets to reverse and decline. This would make the expiry value as 7800 5 of or 8200 strike. Let us take up a very simple example to understand this. Jul 25, 2016 #3, tnx monkeybusiness for the link. Which means call option writers of 7700, 7800, and 7900 strikes will retain the premiums received. Later in the chapter I will discuss this as well. See below the changes in each version. The formula for puts is (Strike - Close Price) x Open Interest x 100 For example, if SPY closed at 165, the 170 strike puts have the value (170-165) x 37,023 x 100 18,511,500. We will merge our call and put calculations in the next part of the tutorial. In the Money, At the Money, and Out of the Money Options.
Finally, I hope you will enjoy reading this as much as I enjoyed writing this for you. You may wonder why the PCR is used as a contrarian indicator. ByteScout 1 Shareware, spreadsheet SDK - read, write and calculate Excel spreadsheets. It's easier to work the calls and puts separately. So therefore the combined loss of option writers would. Well, what if it turns out that if the Index (Nifty, in India) closed at a certain price on expiry day, hedge funds/institutions would stand to benefit tremendously - doesnt it make sense that hedge funds will. Most traders use this max pain level to identity the strikes which they can write. We will start with the calls. I'd like to share my results with all of you.
You can find the daily pain here.
You do not need to calculate with complex excel stuff or refreshing an excel sheet with web queries. Ive calculated the option pain value as of today (10th May 2016) on excel, have a look at the image.