How to Read Stock Option Quotes

by Ryan Menezes, studioD

A stock option allows you to trade shares of stock in the future at a price set in the present. If the underlying stock rises in value, you can exercise the option and sell the shares for a return on your investment. Investors trade options much as they trade shares of stock, and option quotes list trade data for all available options. The quotes specify the bid and ask price of each option, the expiration date, the last trade price and the daily volume of options traded.

Identify the option type. Call options give you the right to buy shares of stock; put options give you the right to sell shares of stock. Option quotes list calls in one table and puts in a second table. The headings at the top of each table identify the option type.

Identify each option's strike price, which is located in the column marked "Strike." The strike price is the amount you must pay to exercise the option and buy shares of the underlying stock. The option at the top of the table typically has the lowest strike price.

Identify each option's symbol. The symbol, located in a column marked "Symbol," uniquely identifies each option contract. The first characters in the symbol are the same as the underlying stock symbol.

Identify the "Bid," "Ask" and "Last" columns, which reflect the option's trading prices. "Bid" reflects the highest price someone is offering to pay to buy the contract from you. "Ask" is the lowest price at which someone is willing to sell the option. "Last" is the most recent price that someone paid to buy the option. The sum of these values and the option's strike price will be relatively close to the actual price of the stock associated with the option.

Identify the "Vol" column. This column lists the current number of options traded for the day. If a zero shows in this column, it means that the call or put option has not yet traded.

Identify the "Open Int" column. This lists the number of options at each strike price currently open in the hands of investors.

Identify the expiration date of the options, which typically appears at the top of the table, but on some charts, it may appear adjacent to the call and put prices. The expiration date is the last day on which you can exercise an option you've bought. After that, the option expires and is worthless.

About the Author

Ryan Menezes is a professional writer and blogger. He has a Bachelor of Science in journalism from Boston University and has written for the American Civil Liberties Union, the marketing firm InSegment and the project management service Assembla. He is also a member of Mensa and the American Parliamentary Debate Association.

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