• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

As U.S. Treasury intervened in the bond market, the Netherlands rushed 86 tons of gold out of America because of ‘geopolitical unrest’

2

'Critical employees will begin to retire': Trump’s new pay plan will deny most federal roles a raise, and it has workers warning of a retention crunch

3

One of MacKenzie Scott's latest donations takes her HBCU giving to well over $1 billion

1

As U.S. Treasury intervened in the bond market, the Netherlands rushed 86 tons of gold out of America because of ‘geopolitical unrest’

2

'Critical employees will begin to retire': Trump’s new pay plan will deny most federal roles a raise, and it has workers warning of a retention crunch

3

One of MacKenzie Scott's latest donations takes her HBCU giving to well over $1 billion

What Foxconn’s blast did to Apple’s Max Pain price

By
Philip Elmer-DeWitt
Philip Elmer-DeWitt
Down Arrow Button Icon
By
Philip Elmer-DeWitt
Philip Elmer-DeWitt
Down Arrow Button Icon
May 23, 2011, 9:00 AM ET
Google source logo
Add Fortune on Google for similar content.

A case study in how the options market reacts to breaking news



AAPL Max Pain before and after the explosion. Source: BSL

We’ve written a lot lately about how traders buying and selling options seem to be driving Apple’s (AAPL) share price (see here, here and here.) So we thought it might be instructive to look at what happened on a day when Apple’s share price took over and drove the options market — specifically, the so-called Max Pain price point where options writers make the most profit and options buyers suffer the biggest losses.

Apple’s shares have closed at or near Max Pain nearly every Friday since weekly option trading in Apple began last July, and they might have done so again last Friday if unexpected news — in the form of an explosion in a Chinese iPad factory — hadn’t intervened.

The charts above are from a slide show put together by reader Mick Blackledge, a real-life rocket scientist and veteran computer user who’s been following the Max Pain story closely. In the first chart, a snapshot taken before Friday’s opening, Max Pain stood at $340. Apple opened at $339.56 and traded within a $1 range until news of the explosion in China crossed the wires. In the second, taken after the closing bell, Max Pain has shifted to $335. Apple closed at $335.22.

For more detail, see Blackledge’s “Fast Look at Weekly Options” here.

About the Author
By Philip Elmer-DeWitt
See full bioRight Arrow Button Icon
Google source logo
Add Fortune on Google for similar content.

Latest in


Most Popular

Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • TikTok icon
  • YouTube icon

    Latest in


    Most Popular

    © 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
    FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.