The difference in bid and offer price occurs in the options which are not traded
often.Suppose for example, assume that a seller want to sell Tata Steel 700 CA of Dec 2009 at Rs 100(Offer Price),and a buyer of 700 CA Dec 2009 thinks it will be better to take the risk for Rs 10(Bid Price) and since there is limited buyer and seller,the price difference is huge.
Subrata