Reading the options chain
Bid, ask, mid, spread, open interest, and volume — what the columns are telling you.
The options chain lists every tradable contract: calls on one side, puts on the other, one row per strike, grouped by expiry. Each row shows bid, ask, last price, volume, open interest and usually implied volatility and the greeks. Learning to read it quickly is half the skill.
Bid, ask, and mid
- Bid — the price you can sell at.
- Ask — the price you pay to buy.
- Mid — the midpoint, the model's fair value. The gap between bid and ask is the spread, a cost you pay on the way in and out.
Wide spreads are a hidden tax
Illiquid strikes have wide spreads. Buying at the ask and later selling at the bid can cost you several percent before the stock moves at all. Prefer liquid, near-the-money strikes.Open interest and volume
- Open interest — total contracts currently outstanding at that strike. High OI means liquidity and marks strikes the market cares about.
- Volume — contracts traded today. A volume spike flags where fresh positioning is happening.
Large open interest at a strike is also what powers dealer gamma effects — the subject of the GEX education track.