How to Read an Options Chain

An options chain organizes available contracts by expiration and strike. It is a market display—not a recommendation engine.

Expiration and strike

Start by confirming the expiration date and strike. A weekly contract and a monthly contract can behave very differently even at the same strike.

Bid and ask

The bid is associated with what buyers are currently offering; the ask is associated with what sellers are requesting. The difference is the bid-ask spread. Wide spreads can make entering and exiting expensive.

Volume and open interest

Volume measures contracts traded during a session. Open interest measures contracts that remain open under exchange accounting. Neither measure proves that a trade is bullish or bearish.

Implied volatility

Implied volatility is an input consistent with market prices under a model. Compare it across strikes and expirations carefully rather than treating one number as a prediction.

Before placing an order

Verify contract multiplier, exercise style, settlement, deliverables, corporate actions, and whether the quoted data is delayed.