I'll keep it simple, max pain on an options chain is the point where essentially those with the least amount of contracts (puts/ calls) are in the money. I.e the maximum point that traders lose cash and the house wins. This week's strike call was at $2 so market algos trailed downward to get as close as possible to that max pain price of $2. Now despite that i opened a small position at a $1.67 just in case if we hit a gamma ramp at the biggest $3 strike option. As you all know we didn't, but that's okay. Next weeks max pain is $2.50 along with a fair amount of ftds that are due. If we hit $3 good shot we run. Also ideally should be close above $3, intraday over $3 means less as markets restructure at eod. So now with this week over and price anchor of $2 has been lifted i opened a more sizable position at $2.26.
There's plenty of other things to talk about but no time. All you need to know is that there is risk here. May not squeeze, it may squeeze, odds have gone down but there is still opportunity to make money.
