To expand the term beyond its original scope, Max Pain punishes people betting on the future, regardless of the direction. Max Pain is the feeling that we’re doomed to fail—that even when you are right (about climate change, for example) you are wrong (you flee New York City and find that even Montana is somehow underwater). You are right, but you can’t win because conditions oscillate dramatically between opposing states, hurting everyone equally. The most painful outcome is the most likely outcome (everyone is wrong long enough to lose conviction, for example).
Ultimately, it is only those who control the flows of information and capital —social media platforms, market makers, exchanges—that are able to profit systematically. Meanwhile, regular people are going to have to figure out what to do with their attention, money, and predictions for the future.
