# Max Pain Calculator AI Agent Connect

> Determine the exact strike price that minimizes total loss for all option holders and assess pin risk.

## Overview
- **Category:** finance
- **Price:** Free
- **Endpoint:** https://edge.vinkius.com/vk_preview_8jFHRfGJ1pvONFZv3VToEdfgbwdJFFL1P9V2tNtG/ai-agent-connect
- **Tags:** options, max-pain, trading, finance, derivatives

## Description

This MCP server provides precise tools for options traders to identify the Max Pain point. By analyzing strike prices and open interest for both calls and puts, the `calculate_max_pain` tool finds the specific strike where the aggregate loss for option holders is minimized. It also identifies pin risk, which occurs when the underlying price is within 1% of the max pain strike near expiration. Use `validate_market_data` to ensure your options data is consistent and `get_strike_loss_breakdown` to see the specific call and put losses contributing to the total at any given strike.

## Tools

### calculate_max_pain
Determine the exact strike price that minimizes total loss for all option holders and assess pin risk

### get_strike_loss_breakdown
Provide transparency by showing individual call and put losses at a specific strike

### validate_market_data
Ensure provided options data is logically consistent

## Prompt Examples

**Prompt:** 
```
Calculate the max pain for these strikes: [100, 105, 110], call OI: [500, 200, 100], put OI: [100, 300, 600], and underlying price: 104.
```

**Response:** 
```
The max pain strike is 105. The price distance is 1.0, and there is no pin risk.
```

**Prompt:** 
```
Is there pin risk if the max pain strike is 150 and the current price is 150.5?
```

**Response:** 
```
Yes, there is pin risk because the price is within 1% of the max pain strike.
```

**Prompt:** 
```
Show me the loss breakdown for strike 110 with strikes [100, 110, 120], call OI [100, 100, 100], and put OI [100, 100, 100].
```

**Response:** 
```
At strike 110, the call loss is 10000 and the put loss is 10000, resulting in a total loss of 20000.
```

## Frequently Asked Questions

**What is the Max Pain point?**
The Max Pain point is the strike price where the total aggregate loss for all option holders is minimized, often used to estimate where market makers might drive the price.

**How do I know if there is pin risk?**
The `calculate_max_pain` tool automatically flags pin risk if the underlying price is within 1% of the calculated max pain strike.

**Can I see the individual losses for a strike?**
Yes, you can use the `get_strike_loss_breakdown` tool to view the specific call loss and put loss components for any candidate strike.