Can one assume expiry strike using max pain on expiry day ?
Max Pain can be a useful indicator for understanding market sentiment and where the market might tend to gravitate towards expiration. However, it is not a guarantee that the market will move to that strike price on the actual expiration day. Market dynamics can change rapidly, and various factors can influence the final price of the underlying asset, including news, economic data, and unforeseen events.
So, while you can use max pain as one of many tools to help inform your trading decisions, you should not assume that the market will automatically move to the max pain strike on expiration day. It’s essential to consider a wide range of factors, including technical analysis, fundamental analysis, and current market conditions when making trading decisions.