How to Read Bid–Ask Spreads on an Option Chain

1. Read the two sides before the midpoint

Bid is the quoted buying price; ask is the quoted selling price. A put seller should not mistake the ask for collectible premium. Orders can execute inside the spread, but the midpoint is only an arithmetic reference and quotes can change before an order arrives.

Bid $1.40 · Ask $1.60
Spread = $1.60 − $1.40 = $0.20 per share
Mid = ($1.40 + $1.60) / 2 = $1.50

2. Translate the gap into contract dollars

For a standard 100-share contract, a $0.20 per-share spread is a $20 gap between bid and ask. That is not automatically a $20 fee: the actual effect depends on your entry and exit prices. In this example, selling at $1.40 instead of the $1.50 mid reduces premium by $10.

3. Read spread and OI as different signals

Open interest (OI) is the number of outstanding contracts, not shares and not today’s trading volume. It is a dated position count, whereas a bid–ask quote describes available prices at a moment in time. Large OI does not tell you the size you can execute now.

1. Check both sides of the quote and whether the data is current.
2. Inspect spread in dollars, then inspect volume and OI in the contract detail.
3. Compare the same expiration and nearby strikes; do not rank contracts by OI alone.

What the two bars mean in Shortput

The background bar shows put OI relative to the largest displayed OI in that expiry column, including rows outside the viewport. A full bar in one column need not represent the same number of contracts as a full bar in another column.

The thin amber line uses a fixed absolute spread scale: $0.00 to $1.00 per share. A $0.20 spread fills one fifth of the width; $1.00 or more fills it. Hover retains the uncapped value. This is a visual convention, not an acceptable-spread threshold. Missing, stale or invalid quotes have no line.