It's a comparison. Compare that option with other option from that security, from similar securities. Compare the impied volatility with current stock movement, expected near term movement, etc....
First, understand that for your purposes the price of an option is its implied volatility, not the number of dollars and cents you pay for it. Second, that IV can be too high or too low relative to the IV of another option on that security (violating the normal relationship between those two options), or relative to the ACTUAL volatility of the underlying security. For example, let's say that XYZ out-of-the-money puts usually trade at a higher IV than at-the-money XYZ options, which is normal. At one point you notice that XYZ otm puts are trading at the same IV as atm options. You could correctly say that XYZ puts are underpriced. Or, imagine that xyz stock has an actual volatility of 38%, and the atm straddle is also trading at 38% iv. Suddenly, xyz stock becomes much more volatile, but you can still buy the straddle at 38%. You could say that the straddle is underpriced. Don't hold your breath waiting for the above scenarios to happen - they're extreme examples for purposes of illustration. That sort of thing does happen, but is generally more subtle than what I described.
We used to have quite a bit of luck gamma scalping the troughs in IV. Our favorite was GS. That graph was screwed up, so I posted SPY instead. Check out the nice Gamma scalp trough between .15 and .2 for a while. Question is, are you layers going to pay for theta? Dis es de question. Maybe it's valid again. Who knows? (Don't freak out guys, I'm with echo. I only use the TOS platform for the NYSE tick, and Volume profile. I know it shows up as a paper account.)
If you have TOS you can click back through daily option prices for the past several years, although some here have complained about the accuracy of the data.