I've traded AAPL successfully throughout 2014 using the principals of max pain. Or more accurately, the Poormans algorithm. That algorithm relies on the same basic idea, that when investors buy option contracts, the MM buys the stock. Conversely when investors sell the option contracts or they expire, the MM sells the stock.

What really determines where max pain will have an effect is the number of open contracts. The larger the number of contracts, the larger the MM position in the stock. It follows that larger the MM position, the more effect activity in that position affects the stock price.

AAPL is usually the top stock in number of open option contracts. But are there other stocks with a high amount of open options? Or, could AAPL go through a period of time without much option open interest? If I knew what stocks had high amounts of open interest, I would know which were more likely to be affect by max pain or the poormans algorithm.

That's why I introduced the High Open Interest Chart. This chart can be used to determine which stocks have more than 50,000 open Call contracts across all strikes. Monthly options have more volume than weekly options, so the monthly numbers is 200,000 open Calls. Now you can see at a glance which stocks have a large number of option contracts for any week.

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