How to Read an Option Chain: Bid, Ask, Last, Volume and Open Interest
An option chain is the table that lists every available option on one underlying for one expiration date: calls on one side, puts on the other, and the strike prices down the middle. Each row tells you what buyers are bidding, what sellers are asking, the last trade and how active the contract is. Reading it well is the first step of any options analysis. This guide from OptionLab (option-graph.com) walks through the columns with a sample chain, shows what the bid-ask spread costs, and explains what the chain in the OptionLab app shows.
The Layout of a Chain
A chain is built around one expiration. Change the expiration and every price changes, because the time left is different. Strikes run from low to high; for calls, the strikes below the current price are in the money, and for puts, the strikes above it. The sample below is for a stock at $100 with 30 days to expiration. The prices are illustrative, close to Black-Scholes values at 25% implied volatility; they are not market data. The Black-Scholes calculator on option-graph.com shows how much of each of these premiums is time value.
| Strike | Call bid | Call ask | Call last | Call volume | Call open interest | Put bid | Put ask |
|---|---|---|---|---|---|---|---|
| $95 | 6.10 | 6.30 | 6.25 | 140 | 2,350 | 0.85 | 0.95 |
| $100 | 2.95 | 3.10 | 3.00 | 820 | 5,900 | 2.60 | 2.75 |
| $105 | 1.12 | 1.22 | 1.15 | 610 | 4,100 | 5.70 | 5.95 |
What Each Column Means
- Bid: the highest price a buyer is currently willing to pay. If you sell at the market, you usually receive the bid.
- Ask: the lowest price a seller is currently willing to accept. If you buy at the market, you usually pay the ask.
- Last: the price of the most recent trade. It can be minutes or hours old, so it may sit outside the current bid and ask.
- Volume: the number of contracts traded today. It shows today's activity, not how many positions exist.
- Open interest: the number of contracts still open -- bought and not yet closed, exercised or expired. It is typically reported once a day.
Prices are quoted per share. A US equity contract covers 100 shares, so the $3.10 ask on the $100 call costs $310 per contract. The calculators on option-graph.com take the premium per share and the shares per contract as separate inputs for exactly this reason.
The Spread Is a Cost
The gap between bid and ask is the bid-ask spread. If you buy the $100 call at $3.10 and immediately sell it at $2.95, you lose $0.15 per share, or $15 per contract, without the stock moving at all. Wide spreads are common in strikes far from the current price and in contracts with little open interest. Many traders look at the mid price -- halfway between bid and ask, $3.025 here -- as a fair reference, but there is no guarantee of a fill at the mid. When you test a trade on option-graph.com, enter the price you would realistically pay, not the last trade.
A Worked Example: From the Chain to the Payoff
Say you buy the $100 call at the ask, $3.10. Your breakeven at expiration is the strike plus what you paid: $103.10. If the stock finishes at $106, the call is worth $6 and the result is +$290 per contract. If it finishes at $102, the call is worth $2 and the result is −$110, even though the call is in the money. Had you bought at the mid, each result would be $7.50 better per contract -- small for one trade, meaningful over many. Entering both prices on option-graph.com shows how the breakeven moves. The chart below is what this position looks like when you enter it on option-graph.com.
Long $100 call bought at the $3.10 ask, at expiration
Profit zoneLoss zoneK = StrikeBE = Breakeven
| Point | US dollars per contract (100 shares) |
|---|---|
| Strike 100 | −310 |
| Breakeven 103.1 | 0 |
| P/L at 90 | −310 |
| P/L at 115 | +1,190 |
- Bought at the ask of the sample chain: $3.10 per share
- One contract = 100 shares
- Held to expiration; commissions excluded
Reading a Chain Step by Step
- Pick the expiration first; it sets how much time value every option carries.
- Find the current price of the underlying and the strikes around it.
- For each strike you consider, read bid and ask, not only last.
- Check volume and open interest: low numbers usually mean wider spreads and harder exits.
- Compare premiums across strikes, then test the shortlisted ones on option-graph.com before deciding.
What the OptionLab Chain Shows
The chain in the OptionLab app is built for analysis rather than order entry. For each option it shows a market price -- the last price received, which is delayed and is not a live quote -- the option's base price from the last daily capture, the change in percent, and a Black-Scholes theoretical price. It does not show bid, ask, volume or open interest. A Buy or Sell click adds the option to a position at its market price so you can see the payoff chart; no order is sent to a broker. For a live bid and ask, use your broker's screen, and use option-graph.com to analyze the position you are considering.
Risks and Limitations
A chain is a snapshot. Bids and asks change constantly, the last price can be stale, and open interest is a day old. Illiquid strikes can be hard to exit at a fair price. The sample prices in this article are illustrative; recheck the breakeven with a realistic price on option-graph.com before trading. Options are not suitable for every investor. OptionLab (option-graph.com) is an educational and analytical tool and does not provide investment advice.
Summary
- A chain lists calls and puts for one expiration, with strikes in the middle.
- Buy at the ask, sell at the bid; the spread is a real cost.
- Last is history; volume is today; open interest is positions still open.
- Use the price you would actually pay to compute the breakeven.
- Analyze the shortlisted strikes on option-graph.com before trading.