The essential terms, one example, five short questions.
Beginner guide · Step by step
How to Read an Options Chain: Bid, Ask, Open Interest, IV & Greeks
An options chain lists the available calls and puts for an underlying, organized by expiration and strike price. It lets you compare prices, trading activity and risk across contracts. This guide walks through the key columns using one consistent example.
By Daniel Berg ·
Underlying
$175
ATM Strike
$175
Illustrative example · not live data
Call
- Bid
- $4.20
- Ask
- $4.40
Put
- Bid
- $4.20
- Ask
- $4.40
Bid–Ask Spread$0.20
ATM call context
- Volume
- 420
- Open Interest
- 2,100
- IV
- 22 %
- Delta
- 0.52
The essentials first
Understand one row, then go deeper
- An options chain is a list of available calls and puts for a stock or another underlying.
- Start with expiration and strike. Then read bid, ask and the cost of a whole contract.
- On your first read, you can leave individual Greeks and model formulas for later. Understanding the risks still matters before a trading decision.
Options chain in 5 seconds
- 1
Expiration
When does the option expire?
- 2
Strike
At what exercise price?
- 3
Bid / Ask
What prices are buyers offering and sellers asking?
- 4
Volume / OI
How much traded, and how much remains open?
- 5
IV
How much movement is priced in?
- 6
Greeks
How does the option price react?
The terms, in plain language
- Bid
- What buyers are currently offering. Here: $4.20 per share.
- Ask
- What sellers currently want. Here: $4.40 per share; execution is not guaranteed.
- Spread
- The gap between ask and bid: $4.40 − $4.20 = $0.20. A wider gap makes comparing prices harder.
- Volume
- How many contracts traded today. Here: 420.
- Open Interest
- How many contracts remain open. Here: 2,100; a high number does not guarantee liquidity.
- IV
- How much future movement the option price reflects in a model. 22% does not predict a 22% stock gain.
- Greeks
- How the option price reacts to price, time and volatility. Delta 0.52 suggests roughly a $0.52 premium change for a $1 stock move, with other inputs unchanged.
Read an options chain yourself
Five short questions. Illustrative teaching figures, not live market data.
- Underlying
- $175
- ATM Strike
- $175
- Bid
- $4.20
- Ask
- $4.40
- Spread
- $0.20
- Multiplier
- 100
- Volume
- 420
- Open Interest
- 2,100
- IV
- 22 %
- Delta
- 0.52
Step 1 / 5
Find the ATM call.
Choose your next step
You can now identify the key columns. For detail on last-trade prices, liquidity and the three example calls, open the full guide.
The overview before the detail
Four signals to read first
- 1
Time horizon
Set the expiration and time horizon.
- 2
Position
Locate the strike as ITM, ATM or OTM relative to the underlying.
- 3
Price
Read bid, ask, midpoint and spread as current market information.
- 4
Context
Use volume, open interest, IV and Greeks together for context.
Options chain anatomy: calls left, strike in the middle, puts right
Read each row as a call and a put sharing the same strike and expiration. Our reference point is at the money (ATM): both strike and stock price are $175. Brokers may arrange columns differently; the meaning of each field stays the same.
Left
Calls
The right to buy at the strike.
ATM Strike
$175
Right
Puts
The right to sell at the strike.
Call strikes relative to the $175 underlying
- $170ITM
- $175ATM
- $180OTM
See the full example data for calls and puts
Illustrative data. Scroll within the table to see all columns. OI = open interest; Vol. = traded volume.
| CALLS | Strike | PUTS | ||||||
|---|---|---|---|---|---|---|---|---|
| OI | Vol. | Bid | Ask | Bid | Ask | Vol. | OI | |
| 1,250 | 180 | 7.10 | 7.40 | $170 | 2.10 | 2.40 | 95 | 900 |
| 2,100 | 420 | 4.20 | 4.40 | $175ATM | 4.20 | 4.40 | 360 | 1,800 |
| 450 | 60 | 2.10 | 2.50 | $180 | 7.10 | 7.50 | 75 | 620 |
How to read the example, step by step
Follow one ATM call through five stations — from the stock price to the actual contract cost and its risks.
Underlying & ATM
Underlying
$175
Strike
$175
Same price. At the money (ATM).
The strike is at the current price: this call is ATM.
This gives you a clear reference point for comparing contracts.
Bid / Ask / Mid
Bid
$4.20
Ask
$4.40
Mid $4.30
Spread = $0.20
$4.20 is the highest displayed bid, $4.40 the lowest ask; $4.30 is only the midpoint.
Bid and ask describe the current market better than a stale last trade.
Spread & contract value
$4.40 × 100 =
$440
Per contract · before fees
The spread is ask minus bid. With the assumed 100-share multiplier, $4.40 per share becomes $440 per contract.
This shows the per-contract outlay before fees, rather than only the small per-share quote.
Volume & Open Interest
- Volume
- 420
- Traded this session
- Open Interest
- 2,100
- Still outstanding
420 contracts traded during the session; 2,100 remain outstanding in the series.
They add context to spread and displayed size, but do not guarantee execution.
IV & Delta
- IV
- 22 %
- Delta
- 0.52
IV is a model-based volatility estimate; delta approximates the local premium response to a $1 stock move.
These inputs explain why the premium can change even without a new transaction.
Start with expiration. All three rows have 30 days remaining, so you can compare strikes without also changing the time horizon. Next, find the $175 stock price: the $175 strike is our ATM anchor. For the meaning of buying and selling rights, see the basics of calls and puts.
Read left of the $175 strike: $4.20 bid, $4.40 ask. The difference is $0.20. Only then bring in 420 contracts traded and 2,100 outstanding. They show activity and positioning in aggregate; they do not promise an immediate fill for a particular order size. This simplified table does not include order-book depth.
Now add IV and Greeks from the comparison below: 22% IV and 0.52 delta for the ATM call are assumptions in this example. IV puts the volatility embedded in the price into context; delta describes a local price response. For how those inputs affect the premium, explore how options prices work.
Options chain columns explained
Separate the contract from its price first. Strike and expiration identify the right you are looking at. Bid, ask and last describe different price observations for that right.
1The contract
- Expiration
- Expiration limits the lifetime of the option right. Our example has 30 days remaining; another expiration changes time value and risk. Also check the specific product’s last trading day and settlement rules.
- Strike / exercise price
- The strike is the agreed exercise price. A $175 call gives the right to buy the underlying at $175. This is not the option premium: the ask for this call is $4.40 per share in our example.
- Call / Put
- A call provides a right to buy; a put provides a right to sell. At the same $170 strike with the stock at $175, the call has intrinsic value and the put does not. Buying a right or selling an obligation is a separate decision.
2The price
- Bid
- The highest displayed buying quote. Buyers bid $4.20 for the $175 call. It is a reference for selling, not an execution guarantee: the quote, available size and market can change.
- Ask
- The lowest displayed selling quote. The same call is offered at $4.40. A purchase order therefore needs to account for price and size; even a visible offer can disappear.
- Mid
- The arithmetic midpoint between bid and ask: (4.20 + 4.40) / 2 = $4.30. It helps with comparisons but is neither an actual transaction nor a guaranteed executable price.
- Last / last trade
- The price of the most recent transaction. A last trade at $4.00 could come from an earlier market, while the current quote is $4.20 / $4.40. Check its timestamp before using it to value a position now.
- Bid-Ask-Spread
- The difference between ask and bid: here $0.20, about 4.7% of the $4.30 midpoint. The same absolute gap can matter more for a much cheaper option. Check spread alongside displayed size; there is no universal good cutoff.
Before expiration, review the expiration calendar and our explanation of exercise and assignment. A calendar does not replace your broker’s product-specific deadlines.
Volume vs open interest: activity is not the same as liquidity
Volume counts contracts traded during a trading session. Open interest counts outstanding contracts in an option series. The first measures activity over a period; the second measures a stock of open contracts — so the numbers can be very different.
Volume: traded this session
The ATM call shows 420 contracts. That does not mean 420 different people: contracts can trade repeatedly. Volume helps identify where trading happened this session, without proving open positions or the next available fill.
Open interest: still outstanding
OI of 2,100 counts open contracts once each, despite each having a buyer and seller. For listed US options, it is generally updated daily. Check the data timestamp: session volume and OI do not necessarily refer to the same moment.
A new contract increases OI when both sides open positions; it decreases when both close. If an existing position simply changes hands, OI can stay unchanged while volume rises. Even a large number of outstanding contracts does not reveal bullish or bearish intent by itself.
Tradability needs the whole picture. Check current quotes, spread relative to premium, displayed size and market conditions. Volume and OI add context. The Options Industry Council explains why neither alone guarantees liquidity.
IV and Greeks: what moves an option’s price
Implied volatility (IV) is the annualized volatility inferred from an option premium using a pricing model. The 22% in our ATM example is neither a forecast of a 22% stock gain nor guaranteed future volatility. With other inputs unchanged, higher IV typically increases the premium of a conventional call or put.
Compare IV in the context of expiration, strike and events. A high number does not prove an option is overpriced. Our implied volatility guide explains that context. Greeks complement IV as model-based sensitivities, not predictions.
Four perspectives. Scroll sideways or choose a Greek.
The figures above describe a long option per share and are rounded teaching assumptions. Brokers may display different units. Short positions reverse the position sensitivities. Explore their interaction in the guide to delta, gamma, theta and vega.
ITM, ATM and OTM: strike relative to the stock price
Moneyness describes intrinsic value, not the profit on your position. A call has intrinsic value when the stock is above the strike; a put has it when the stock is below. Exactly at the strike, intrinsic value is zero; in practice ATM also describes the nearest strike.
Call progression with a $175 underlying: $170 ITM → $175 ATM → $180 OTM.
Three positions on the same scale. Scroll sideways on small screens.
The $170 call has $5 of intrinsic value but costs $7.40 at the ask in this example. ITM therefore does not automatically mean profit. For a purchase at that price, the simplified expiration breakeven would be $177.40 before fees. Long calls and long puts compared separates intrinsic value, premium and outcome.
With otherwise comparable conditions, deeper ITM options typically have a higher absolute delta, while OTM options have a lower one. There are no fixed bands: expiration and IV also change delta. A lower purchase price reduces the premium paid per contract but does not automatically make a contract more attractive.
What an options chain can — and cannot — tell you
It provides a market snapshot
Available strikes and expirations, displayed buying and selling quotes, observed activity, and model-based IV and sensitivities. These let you compare contracts on a common basis. Check whether data is delayed and which columns your platform calculates.
It does not provide certainty
You cannot read future price direction, profit, exact realized volatility or the motive behind large positions with certainty. Every open option has two sides; OI alone cannot tell you who is hedging, speculating or holding part of a more complex position.
Risk comes from the whole position, not one table row. Our options strategies overview shows how rights and obligations combine.
Common mistakes when reading an options chain
Treating last as today’s purchase price
Check the timestamp and current bid/ask. An earlier transaction is not an offer still available to you.
Confusing volume with open interest
Separate session activity from outstanding contracts. Even high OI does not prove that an order can always be filled.
Looking only for the cheapest premium
Include strike, spread and time remaining. A cheaper OTM option can expire worthless and be relatively costly to trade.
Ignoring IV and expiration
Getting the stock direction right may not be enough: time decay or falling IV can reduce the option’s price.
Three calls, three different trade-offs
Return to the same fictional stock at $175. We now add IV and delta to the call side. All three contracts have 30 days remaining; the model values are illustrative assumptions, not calibrated live calculations. This comparison is not a recommendation to buy.
Same expiration, different trade-offs. Spread is shown as a rounded percentage of the midpoint.
CALL · ITM
$170 strike
- Bid / Ask
- $7.10 / $7.40
- Spread
- $0.30 · 4.1 %
- Volume / OI
- 180 / 1,250
- IV · Delta
- 23 % · 0.68
The $7.40 ask means a larger premium outlay. Delta of 0.68 describes a stronger immediate price response than the other two calls. Its absolute spread is wider than the ATM call’s, but smaller relative to the midpoint. That alone does not make it the better contract.
CALL · ATM
$175 strike
- Bid / Ask
- $4.20 / $4.40
- Spread
- $0.20 · 4.7 %
- Volume / OI
- 420 / 2,100
- IV · Delta
- 22 % · 0.52
This row has the tightest absolute spread and the highest volume and OI in the example. That helps with context but guarantees no fill. Buying at $4.40 gives a simplified expiration breakeven of $179.40 before fees, not $175.
CALL · OTM
$180 strike
- Bid / Ask
- $2.10 / $2.50
- Spread
- $0.40 · 17.4 %
- Volume / OI
- 60 / 450
- IV · Delta
- 23 % · 0.36
The $2.50 ask looks cheaper. But the $0.40 spread is much larger relative to the premium, and delta is lower. At expiration the stock first needs to exceed the strike for intrinsic value to exist; that does not automatically recover the premium paid.
For a clearer learning exercise, change one factor at a time. Use our options position P/L calculator to turn strike and premium into outcome scenarios. Results at expiration are different from possible resale prices during the option’s lifetime.
Before selecting a contract: a quick checklist
- Do I understand expiration, the last trading day and product terms?
- Have I located the strike relative to the underlying — for a call or a put?
- Have I checked current bid/ask, spread relative to premium and displayed size?
- Have I read volume and OI, including their timestamps, as context?
- Have I included IV, delta and theta when assessing the price?
- Do I understand the contract multiplier, fees and maximum strategy risk?
This checklist structures your review; it is not a trading signal. A purchased call or put can lose its entire premium. Short options can carry risks far beyond that amount.
Options chain FAQ
What is an options chain?
An options chain lists available calls and puts for an underlying, organized by expiration and strike. It typically shows bid, ask, volume, open interest and, depending on the platform, IV and Greeks. Different rows represent different contracts, not multiple prices for the same option.
How do you read an options chain step by step?
Start with expiration, locate the strike relative to the underlying and read bid and ask. Then consider spread, displayed size, volume and open interest together. Use IV and Greeks to understand pricing and risk. No single column replaces this combined view.
What is the difference between bid and ask?
Bid is the highest displayed buying quote; ask is the lowest displayed selling quote. With a $4.20 bid and $4.40 ask, the spread is $0.20. The $4.30 midpoint is only an arithmetic average. Neither the midpoint nor a displayed quote guarantees execution.
Which matters more: volume or open interest?
There is no universal ranking. Volume measures contracts traded during a session; open interest measures outstanding contracts. They provide different context. Liquidity also depends on current quotes, spread, displayed size and market conditions; high readings alone are not a guarantee.
What does open interest mean in options?
Open interest is the number of outstanding contracts in an option series. Each contract has a long and a short side but is counted once. OI is not the number of traders and does not establish a bullish or bearish view. Check when the figure was updated.
What do ITM, ATM and OTM mean?
ITM means the option has intrinsic value: the stock is above the strike for a call, below it for a put. ATM is at or near the current price; OTM has no intrinsic value. Without the premium paid and costs, these labels do not tell you whether a position is profitable.
Which options chain columns matter most for beginners?
Start with expiration, call or put, strike and current bid/ask. Add volume, open interest and displayed size to assess tradability. Then use IV, delta and theta to understand the premium. Always check whether prices are displayed per share or per contract.
Why can an option’s last price be misleading?
Last comes from the most recent completed trade and may be stale. The stock price, volatility and quotes may have changed since then. A last price of $4.00 therefore does not mean you can trade at $4.00 now. Read its timestamp alongside current bid/ask quotes.
Sources and context
All market figures are fictional teaching assumptions. Definitions and relationships follow these primary sources from the Options Industry Council (OCC). This guide is educational and does not consider individual investment circumstances.
Keep building your understanding
You can now put an options chain into context. Explore whichever input still raises questions, or compare a platform’s data access and costs.