Strike Price Charts: How to Read Option Chains Effectively
Introduction
If you’ve looked at an option chain and felt overwhelmed by all the numbers, you’re not alone. Option chains are rich with information—and the key to mastering them lies in understanding the strike price chart. In this guide, we’ll show you how to read strike price charts and use them to find the best options for your strategy.
What Is a Strike Price Chart?
A strike price chart is another name for the option chain, a table that displays all available call and put options for a given stock or ETF, along with their:
- Strike prices
- Premiums
- Volume
- Open interest
- Bid/Ask prices
- Expiration dates
Most platforms allow sorting and filtering to help you identify optimal trades.
Components of an Option Chain
| Column | What It Means |
|---|---|
| Strike Price | Price at which you can buy/sell the asset |
| Bid | Highest price a buyer is willing to pay |
| Ask | Lowest price a seller will accept |
| Last | Most recent trade price |
| Volume | Number of contracts traded today |
| Open Interest | Total existing open contracts |
| Implied Volatility (IV) | Future expected volatility priced in |
How to Read an Option Chain (Example: AAPL at $180)
| Call Options | Strike Price | Put Options | ||||||
|---|---|---|---|---|---|---|---|---|
| Bid | Ask | Volume | OI | $175 | OI | Volume | Ask | Bid |
| 6.20 | 6.25 | 950 | 10,000 | 8,500 | 1,200 | 6.35 | 6.30 | |
| 3.10 | 3.15 | 1,100 | 12,300 | $180 | 9,000 | 1,000 | 3.25 | 3.20 |
| 1.20 | 1.25 | 800 | 8,400 | $185 | 6,400 | 950 | 1.35 | 1.30 |
- The middle column shows available strike prices.
- Calls are on the left, puts on the right.
- Higher open interest and volume = better liquidity.
- Look for tight bid-ask spreads to reduce slippage.
How to Use Strike Price Charts in Practice
1. Identify Your Target Price
Choose a strike based on your forecast. If you believe AAPL will rise to $185, consider:
- Call Option @ $180 or $185
- Check open interest to ensure liquidity
2. Choose Based on Risk and Reward
- ITM = Higher premium, higher probability
- OTM = Lower premium, higher risk/reward
3. Check Expiry and IV
- Weekly or monthly expiry?
- High IV = more expensive premiums
- Use tools like ThinkorSwim, TradingView, or Webull for chart integration
Tips for Reading Option Chains Efficiently
- Use filters to narrow by expiry, volume, or moneyness
- Compare premiums and breakeven prices
- Look for high OI near key price levels
- Monitor IV crush near earnings or major events
Conclusion
Mastering strike price charts means learning to read option chains with confidence. Once you know how to interpret the data—like bid/ask spreads, volume, and open interest—you’ll be able to make faster and smarter strike price decisions.
FAQs
Q1. What is a strike price chart?
It refers to the option chain—a table showing all available strike prices with related metrics.
Q2. What’s the best indicator in the option chain for liquidity?
Open interest and volume—higher numbers mean better execution.
Q3. How do I find the best strike price using the chain?
Match your market outlook with the strike’s delta, premium, and support/resistance levels.
Q4. What’s a good bid-ask spread for entry?
Look for tight spreads (e.g., $0.05–$0.10) to reduce entry cost.
Q5. Can I trade directly from a strike price chart?
Yes, most platforms let you execute directly from the option chain interface.
