Option Pain Study

Let us see a few stocks that passed the option pain theory.
Option pain is a theory that Option Sellers would want their Options to expire worthless, killing the Option Buyers. Stocks would hover around the Option Pain level, which is the value that would give the most losses to Option Buyers.

Here’s one stock. MGM Mirage

Mgm rose 2% today to hover around $11

Here’s another one. JP Morgan JPM

JPM is now trading at $40.

And here’s a classic example. Sprint is performing so badly in the market, yet today it rose 6% to kill all put buyers at $3.5

Now Sprint is trading at $3.6

Alcoa Inc AA option pain is at $15, but I don’t think there’s enough power for the option sellers to push price up that high. So I guess what they would do is to buy shares and let the price hover the nearest option level, either $14 or $13. However, there is more pain at $14.