Max Pain is an urban legend-slash-theory from the options market, in which certain people are betting on a price to go up and others are betting on it to go down, yet it somehow finds a way to do neither, instead converging on the place where most people’s bets expire worthless, regardless which side they’re on. In this metaphor, “Pain” means both losing money and not knowing what to do, even though you had a reasonable assessment of the future when you started. Max Pain means, even when you’re right, you’re wrong; it describes a climate in which everyone’s opinion is right at some point, but never at the right time.

Max Pain (A Recent History)
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