The “market price” of the option is the number that we display as the price of an options contract (e.g. $.65) on holdings and Invest overview. This is the value we use to calculate your overall portfolio value on your options positions and in your graphs. This value is the option’s last price when the last is in between the bid and ask. This value is the bid price on a long holding when the last is outside of the bid and ask, and the prior day settlement price when no bid or ask exists.
The “premium price” of the option is the number that we display as the price of an options contract (e.g. $.65) on the option chain and trade ticket. This value is the option’s mark price. The mark price is the midpoint between the bid price and the ask price, and it’s used as the simplest way to help determine the theoretical value of an option. If no buyers are currently available in the market, the mark price will display as $0.01.
Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Options Disclosure Document. Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes.