The Options Chain Sheet

Options are most frequently quoted in a list format called a “chain sheet.” Each chain sheet has several components and although they are not complicated but it would be helpful to walk through each section so you understand what to look for when evaluating an option trade.

[VIDEO] The Options Chain Sheet

In this article, we will be using a typical chain sheet for the stock Microsoft Corp (MSFT) for demonstration. Keep in mind that every online broker uses a slightly different version of a chain sheet. However, they are similar enough that it is usually not a challenge for a trader to shift from one version to another.

Each element of the chain sheet are described below. The numbers reference each element’s position on the image below.

The Options Chain Sheet
The Options Chain Sheet

Calls and puts (1)

Chain sheets are arranged with calls on the left hand side of the list of options and puts on the right hand side. In some chain sheet versions, the calls and puts are in a single list but the format below is more common.

Strike prices (2)

The available strike prices are listed down the center of the chain sheet. There is a call and a put contract that correspond to each strike price. If you need some help understanding what a call or put is, click here first.

Bid and ask (3)

Each call and put at every strike price has a listed bid (sell price) and ask (buy price). These prices are quoted per share, which means that you need to multiply it by the number of shares per contract, or 100. That will tell you how much a single contract will cost to buy, or is worth to sell.

Open interest (4)

The number of contracts of a call or put at a specific strike price currently held by other investors.

Volume (5)

The number of contracts of a call or put at a specific strike price bought and sold today.

Extra info (6)

Depending on your broker, there may be several other columns for each option contract. This extra information may include last trade price, implied volatility or some of the option Greeks. The most critical information, however, is contained in items 1-5 of the chain sheet.

Disclosures

This article is produced by Learning Markets, LLC. The materials presented are being provided to you for educational purposes only. The content was created and is being presented by employees or representatives of Learning Markets, LLC. The information presented or discussed is not a recommendation or an offer of, or solicitation of an offer by Learning Markets or its affiliates to buy, sell or hold any security or other financial product or an endorsement or affirmation of any specific investment strategy. You are fully responsible for your investment decisions. Your choice to engage in a particular investment or investment strategy should be based solely on your own research and evaluation of the risks involved, your financial circumstances and your investment objectives. Learning Markets and its affiliates are not offering or providing, and will not offer or provide, any advice, opinion or recommendation of the suitability, value or profitability of any particular investment or investment strategy.

Any specific securities, or types of securities, used as examples are for demonstration purposes only. None of the information provided should be considered a recommendation or solicitation to invest in, or liquidate, a particular security or type of security.

Investors should consider the investment objectives, charges, expense, and unique risk profile of an Exchange Traded Fund (ETF) carefully before investing. Leveraged and Inverse ETFs may not be suitable for all investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies. These funds’ performance will likely be significantly different than their benchmark over periods of more than one day, and their performance over time may in fact trend opposite of their benchmark. Investors should monitor these holdings, consistent with their strategies, as frequently as daily. A prospectus contains this and other information about the ETF and should be obtained from the issuer. The prospectus should be read carefully before investing.

Investors should consider the investment objectives, risks, charges, and expenses of mutual fund carefully before investing. Mutual funds are subject to market fluctuation including the potential for loss of principal. A prospectus contains this and other information about the fund and is available from the issuer. The prospectus should be read carefully before investing.

Options involve risk and are not suitable for all investors. Detailed information on the risks associated with options can be found by downloading the Characteristics and Risks of Standardized Options and Supplements (PDF) from The Options Clearing Corporation, or by calling the Options Clearing Corporation at 1-888-OPTIONS.

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