lostsol Synthetic Max Pain

14 de jan.

Overview
The lostsol Synthetic Max Pain indicator is a sophisticated visualization tool designed to model options market dynamics directly on your price chart. Because Pine Script cannot access live options Open Interest (OI) from external exchanges, this script utilizes a Synthetic Gaussian Distribution Model to estimate where the "Max Pain" and "Liquidity Walls" likely sit based on current price action and volatility.

How it Works
The indicator reverse-engineers a theoretical options chain by:

Generating a Strike Ladder: It creates a grid of potential strike prices centered around the current market price.

Modeling Synthetic OI: It uses a Gaussian (bell curve) distribution to estimate Open Interest. It assumes higher liquidity sits near "At-the-Money" (ATM) levels and decays as strikes move further out.

Calculating Pain: For every strike, the script calculates the collective "loss" for theoretical option holders. The price point with the lowest total payout is identified as the Max Pain Price.

Key Features
Dual-Timeframe Modeling: Simultaneously calculate Weekly (tight concentration) and Monthly (wide spread) Max Pain levels.

Put/Call Walls: Identifies "Support" and "Resistance" zones based on the highest concentration of simulated Put and Call OI.

Bias Controls: Manually adjust the Put Bias or Call Bias to reflect current market sentiment (e.g., increasing Put Bias if the market is heavily hedged/bearish).

Auto-Strike Detection: Automatically scales strike increments based on asset price (SOL vs. BTC).

How to Use
The Pull Effect: According to Max Pain Theory, price tends to gravitate toward these levels as expiration approaches (especially on Fridays) as market makers hedge their positions.

The Spread: Watch the gap between Weekly and Monthly levels; a large spread often indicates a high-volatility environment, while a convergence can signal a "pinning" event.

Customization: For the best results, adjust the Weekly/Monthly Spread % in the settings to match the current Implied Volatility (IV) of the asset you are trading.

Disclaimer: This indicator uses a mathematical model to estimate options data. It does not reflect live exchange-cleared Open Interest. Use it as a supplemental sentiment tool alongside price action and volume.

14 de jan.

Notas de Lançamento

update comments

14 de jan.

Notas de Lançamento

Updated with anchor for the MP to be calculated from

15 de jan.

Notas de Lançamento

SYNTHETIC OPTIONS MODEL v5 - MULTI-ANCHOR MAX PAIN
//
// Calculates max pain levels using synthetic OI distributions:
// - MP Long: Support level where long positions face max pain
// - MP Short: Resistance level where short positions face max pain
//
// MULTIPLE ANCHORS - Show any combination simultaneously:
// - Hourly: Recalculates each hour
// - Daily: Recalculates each day
// - Weekly: Recalculates each week

15 de jan.

Notas de Lançamento

// SYNTHETIC OPTIONS MODEL v5 - MULTI-ANCHOR MAX PAIN
//
// Calculates max pain levels using synthetic OI distributions:
// - MP Long: Support level where long positions face max pain
// - MP Short: Resistance level where short positions face max pain
//
// MULTIPLE ANCHORS - Show any combination simultaneously:
// - Hourly: Recalculates each hour
// - Daily: Recalculates each day
// - Weekly: Recalculates each week

17 de jan.

Notas de Lançamento

added 4 hr anchor, cleaned up appearence.