Just a couple of notes about the parameters:
data - It is interpreted as a binary string
method - Regular string, make sure you check openssl_get_cipher_methods() for a list of the ciphers available in your server*
password - As biohazard mentioned before, this is actually THE KEY! It should be in hex format.
options - As explained in the Parameters section
iv - Initialization Vector. Different than biohazard mentioned before, this should be a BINARY string. You should check for your particular implementation.
To verify the length/format of your IV, you can provide strings of different lengths and check the error log. For example, in PHP 5.5.9 (Ubuntu 14.04 LTS), providing a 32 byte hex string (which would represent a 16 byte binary IV) throws an error.
"IV passed is 32 bytes long which is longer than the 16 expected by the selected cipher" (cipher chosen was 'aes-256-cbc' which uses an IV of 128 bits, its block size).
Alternatively, you can use openssl_cipher_iv_length().
From the security standpoint, make sure you understand whether your IV needs to be random, secret or encrypted. Many times the IV can be non-secret but it has to be a cryptographically secure random number. Make sure you generate it with an appropriate function like openssl_random_pseudo_bytes(), not mt_rand().
*Note that the available cipher methods can differ between your dev server and your production server! They will depend on the installation and compilation options used for OpenSSL in your machine(s).
