Max-pain gravity trade
The max-pain gravity trade tests a common expiry-week belief: that NIFTY tends to drift toward the strike where option buyers would lose the most. Two sessions before the weekly expiry, it measures how far the index sits from that max-pain strike and, if the gap is moderate, takes a futures position pointing toward it, exiting as soon as price arrives.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
The strategy earned when the market swung rather than trended. Entry days that closed above their open made ₹25,534 over 12 trades, while those that closed below lost ₹12,852 over 8. By VIX, weeks after a reading between 11.5 and 14.5 made ₹34,373 over 14 trades, and the 6 calmer weeks under 11.5 lost ₹21,691. In smaller samples, choppy sessions earned ₹19,647 over 5 trades and the 4 trend days lost ₹14,714. That fits the code: the target is a level the index must return to, and only the 0.75-ATR stop protects a trade when a trend pushes it the other way.
About this strategy
- Two trading sessions before the NIFTY weekly expiry, at 10:00, compute max pain for that weekly from the open interest at every strike at that moment.
- Skip the week if yesterday's India VIX closed at 14 or higher.
- Measure the gap between max pain and the index (taken from the option chain's synthetic price). Trade only if it is between 0.3% and 1.5%.
- If max pain is above the index, buy one lot of the near-month NIFTY future; if it is below, sell one lot.
- Set a stop 0.75 times the 14-day ATR away from the entry.
- Recompute max pain every minute from live open interest and exit once the index comes within 50 points of it.
- If neither has happened, close at 15:15 on expiry day. The position can be held overnight in between.
Why traders use it
Option writers hold most of the open interest, and many traders believe their hedging nudges the index toward the strike that leaves bought options worth least at expiry. Max pain is easy to read from any option chain, so it is a widely watched expiry-week level. Trading toward it is a mean-reversion bet with a clear target, and the low-VIX filter keeps the trade to calmer weeks when such a pull, if it exists, is less likely to be swamped by news.
The year in plain words
On NIFTY from 1 Oct 2025 to 30 Sep 2026, the filters allowed 20 trades. Fifteen ended with the index reaching max pain and 5 hit the ATR stop, giving a 70% win rate. Net P&L was ₹12,681 before costs and ₹7,758 after ₹20 per order and slippage (statutory charges excluded), profit factor 1.23 before costs. The average loss (₹9,207) was nearly twice the average win (₹4,852), so the edge relied on the high hit rate. November alone made ₹24,690, while a ₹32,358 drawdown shows how few stops it takes to erase several wins.
What the settings do
Risks
- Max pain is recalculated from live open interest and can move 50 to 100 points in a session, so the target is not fixed.
- Futures are held overnight between entry and expiry, so a gap can jump past the ATR stop.
- Losses are much larger than wins on average, so a few stops in a row can wipe out many small gains.
- Being near max pain often just means being near the ATM strike, so the effect may be weaker than it looks.
Who it suits
Traders interested in expiry-week option-chain signals who can hold a futures position for up to two sessions with full margin and accept occasional losses about twice the size of typical wins.
Questions traders ask
What is max pain in NIFTY options?
Max pain is the strike at which the total value of all outstanding calls and puts of an expiry would be smallest if the index settled there, so option buyers as a group lose the most. It is computed from open interest at each strike and changes as positions are added or closed.
Does NIFTY really move toward max pain before expiry?
In this test, when the gap was between 0.3% and 1.5% and VIX was below 14, NIFTY reached within 50 points of max pain in 15 of 20 trades. That is a small sample, and part of the effect may simply be the index staying near the most active strikes.
Is the max pain strategy profitable?
From 1 Oct 2025 to 30 Sep 2026 on NIFTY it made ₹12,681 before costs and ₹7,758 after ₹20 per order and bid-ask slippage, with a ₹32,358 drawdown before costs. Statutory charges are not included. Past results do not guarantee future ones.
Why does the strategy skip high-VIX weeks?
When India VIX is high the market is pricing in larger moves, and news or trend tends to override any pull toward a strike. Restricting trades to weeks after a VIX close below 14 keeps the bet to calmer conditions.