How to Read an Options Chain
All those numbers in the chain, decoded step by step
What Is an Options Chain?
An options chain is a table that shows all available option contracts for a given stock and expiration date. It displays calls on one side and puts on the other, with strike prices running down the middle. Each row represents a different strike price.
Key Columns Explained
Bid — The highest price a buyer is willing to pay for the option right now. This is the price you would receive if you sold.
Ask — The lowest price a seller is willing to accept. This is the price you would pay if you bought.
Last — The price of the most recent trade. This may not reflect the current market if the option trades infrequently.
Volume — The number of contracts traded today. High volume means active trading and typically tighter bid-ask spreads.
Open Interest — The total number of outstanding contracts. High open interest indicates liquidity and often serves as support or resistance levels.
Reading the Chain
The strike price column divides calls (left) from puts (right). Strikes below the current stock price are in-the-money for calls. Strikes above the current stock price are in-the-money for puts. The at-the-money strike is the one closest to the current price.
Key Terms
Bid-Ask Spread — The difference between bid and ask prices; tighter is better
In the Money (ITM) — An option with intrinsic value
Out of the Money (OTM) — An option with no intrinsic value
At the Money (ATM) — Strike price equals the current stock price