Option chain

An option chain is the table that lists every option contract available on a stock, ETF or index, organized by expiration date and strike price. It is where traders find and compare contracts before trading. Each row shows quotes for a call and a put at the same strike, so a single screen reveals how the market is pricing the right to buy or sell at many different levels.

How to read it

Most chains put calls on the left, puts on the right, and strike prices down the middle, with one tab or section per expiration. Typical columns are:

• Bid and ask, the prices to sell and buy the contract, quoted per share.
• Last price and daily change.
• Volume, contracts traded today, and open interest, contracts still outstanding.
• Often implied volatility and Greeks such as delta.

Rows that are in the money are usually shaded, which marks where the current stock price sits.

What to look for

Wide gaps between bid and ask, low volume and low open interest all signal a thin contract that will be costly to trade in and out of. Implied volatility across strikes shows the skew: in most stocks, puts far below the market carry higher implied volatility than calls far above it. Comparing expirations shows how much extra traders pay for more time.

Related terms

• Option
• Strike price
• Open interest
• Implied volatility
• Expiration date
• Options basics: how calls and puts work, with payoff diagrams