What is Bid-Ask Spread

What is Bid-Ask Spread in options...

Bid price - The highest price at which the market maker/traders willing to buy an option from you.

Ask price - The lowest price at which the market maker/traders willing to sell you an options.

Example...

Tiffany & Co.(NYSE:TIF), Jun TIF 65 Call is traded at bid-ask spread, $1.60-$1.65 currently. You can purchase the call option from the market at $1.65 (ask price). If you already own the option and now want to sell it, the  market maker only willing to pay you $1.60 (bid price).

Keep in mind, you always pay higher price to buy an option(ask price), receive lower price to sell an option(bid price).

What determine the spread...

In a high-volume situation (high demand for buying and selling options), bid-ask spread is narrow cause market maker can easily match up the trades. 

At low-volume situation, it more difficult to find a matching trade, so they set a wider spread to offset their risk.

More explanation for options spread:  Read more>>Market Order Vs Limit Order