Ahh, the options listing... Trust me, it isn't as bad as it looks.
It starts with understanding a rather long set of symbols that looks something like this:
This code is simply the ticker symbol for your option. And once you break it down, you'll find that it holds a wealth of information, including all the "standardized" terms we talked about in this article.
The first three or four letters are just the stock ticker for the specific underlying stock, in this case, Google Inc. (NasdaqGS: GOOG):
The next two digits tell you the year the option expires. This is necessary because long-term options last as far out as 30 months, so you may need to know what year is in play. In this case, the Google option is a 2012 contract:
The next four digits reveal the month and the standard expiration date. The expiration date does not vary. It's always the third Saturday of the month. And the last trading day is always the last trading day before that Saturday, usually the third Friday (unless you run up against a holiday). In this case, you've got a March contract (03). And the third Saturday of March 2012 is the 17th.
Now you'll see either a C or a P, to tell you what kind of option you're dealing with – a call or a put. This one happens to be a put:
After that comes the fixed strike price, which is 600:
Finally, any fractional portion of the strike is shown at the end. This comes up only as the result of a stock split, where a previous strike is broken down to become a strike not divisible by 100:
Now that you're a pro, let's take it a step further.
Reading the Options Table
The numbers part doesn't have to be painful or tedious.
In fact, when "real money" (translation: your hard-earned cash) is at stake, I think you'll find this data is suddenly much more interesting.
An options listing gives you the status of the four standardized terms you already know: Type of option, expiration, strike, and the underlying security.
The listing is set up for all of these criteria, and then also provides the two current prices for each strike - the bid and the ask.
Why two prices? Well, the bid is the price at which you can sell an option, and the ask is what you'll pay to buy it. And the difference between the prices – the bid-ask spread – is the profit for the "market maker" who places the trades.
Now let's look at a typical options listing.