Bid, ask, and mid price in options

Summary

The bid is the highest displayed buying price, the ask is the lowest displayed selling price, and the mid price is the simple midpoint between them. In options, these figures are useful reference points, but the mid is not a guaranteed execution level.

Definition

In listed options, the bid shows the best displayed price a buyer is currently offering, while the ask shows the best displayed price a seller is currently willing to accept. The bid-ask spread is the gap between those two prices, and the mid price is the arithmetic midpoint between them. In the article’s liquidity context, these figures matter because they are the starting point for judging whether an option is tradable at a sensible cost. A quote can look neat on screen, but if size is thin or the market is moving quickly, a real fill may end up much closer to the ask for a buyer or the bid for a seller rather than at the mid.

Sources

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