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Mid price

The midpoint between the bid and the ask — a fair estimate of an option’s value and a good starting point for a limit order.

The mid price is simply the midpoint between the bid and the ask of an option: add the two together and divide by two. If a call is quoted 1.20 bid and 1.40 ask, the mid is 1.30. Traders treat it as a fair reference point for what the contract is roughly worth, since the bid is what buyers will pay and the ask is what sellers demand, and the truth usually sits somewhere in between.

In practice you rarely get filled exactly at the mid, but it's the natural starting point for a limit order. Many traders place their order at the mid and see if a market maker takes it, then nudge a cent or two toward the ask (when buying) if nothing happens. On liquid names the mid is a reliable estimate; on illiquid options with a wide spread it can be misleading.

The common mistake is trusting the mid on a contract that barely trades. A spread of 0.80 bid and 1.60 ask has a mid of 1.20, but you may have to pay far more to actually buy. Always check the spread width, not just the mid, before assuming that's the price you'll get.

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Educational use only. Quotes are delayed ~15 minutes and nothing here is financial advice. Options trading involves substantial risk of loss.