Pin risk refers to the way price often gravitates toward - and "pins" at - a heavily traded option strike as expiration approaches, plus the uncertainty that creates for anyone holding options at that strike into the close. It's closely tied to max pain.

Why pinning happens

Near expiration, options at a big strike have enormous gamma. Dealers hedging that exposure buy dips and sell rips around the strike to stay neutral - mechanically pulling price toward it. The more open interest concentrated at a strike, the stronger the magnet. It's dealer hedging, not conspiracy.

The uncertainty for holders

If you hold an option right at the strike into expiration, you don't know whether it will finish a penny in or out of the money - which decides whether it's exercised or expires worthless. That ambiguity is the "risk" in pin risk: you can be unsure of your final position until after the close.

Pinning is gravity created by dealer hedging. The bigger the strike, the stronger the pull.

What it means for you

Pinning explains why price can go eerily quiet near a major strike on expiration day - a low-energy, range-bound tape that traps breakout traders. It also argues for closing options before expiration rather than gambling on which side of the strike they finish. Understanding pinning is understanding one more way dealer flow shapes the tape.