Whether you're choosing an option contract to buy or tracking the value of one you already own, you will need to make sense of the options quotes in newspapers or online. Here is an example of a quote from a fictional company called BigCo:

In the first column, the stock symbol of the underlying security is listed, and beneath it is its closing price (in dollars) on the New York Stock Exchange, repeated for every column of options.

The next column lists strike prices for options contracts. The six columns that follow list the last options premiums (prices) for contracts expiring in May, August, and November—the first three columns are call contracts, and the last three are puts.

The three strike prices listed here for BigCo stock options are $15, $20, and $25 a share. Since stock options contracts are commonly written in 100-share bundles, or lots, the actual values of the contracts are $1,500, $2,000, and $2,500, respectively.

Premiums are also listed on a per-share basis, so you must multiply them by $100 to get the actual premium for a contract. For instance, a May 15 call option on BigCo stock would cost $900; a May 15 put option would cost $50 ($100 X ½).

The "r" symbol means the option was not traded that day; the "s" symbol means the option is not available.

As you can see, the premium for each option contract is related to its current value and the time left before expiration. Since BigCo closed at $20 a share, the call options at $15 a share are all in the money; as a result, they command the largest premiums. The options with earlier expirations cost more, since there is less time for the market price of BigCo stock to drop below $15.

Conversely, put options at $15 are out of the money and would lose money if you had to exercise them today; these are the least expensive options on our chart.