Option naming convention

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In financial markets, an option naming convention is a method of identifying which of many possible options is being quoted or traded.

Standard convention[edit]

In North America the usual naming convention is as follows:

An option code looks like this: SLW150515C19 This is a call option on SLW

Stock option names are written in the following format: SYMBOL+MONTH+STRIKE

  • SYMBOL = Option Root Symbol, normally the stock's ticker symbol
  • MONTH = Month the option expires
  • STRIKE = Strike price

Expiration Month Codes[edit]

Month Call Put
January A M
February B N
March C O
April D P
May E Q
June F R
July G S
August H T
September I U
October J V
November K W
December L X

Strike Price Codes[edit]

Code Strike Prices Code Strike Prices
A 5 105 205 305 405 505 N 70 175 270 370 470 570
B 10 110 210 310 410 510 O 75 175 275 375 475 575
C 15 115 215 315 415 515 P 80 180 280 380 480 580
D 20 120 220 320 420 520 Q 85 185 285 385 485 585
E 25 125 225 325 425 525 R 90 190 290 390 490 590
F 30 130 230 330 430 530 S 95 195 295 395 495 595
G 35 135 235 335 435 535 T 100 200 300 400 500 600
H 40 140 240 340 440 540 U 7.5 37.5 67.5 97.5 127.5 157.5
I 45 145 245 345 445 545 V 12.5 42.5 72.5 102.5 132.5 162.5
J 50 150 250 350 450 550 W 17.5 47.5 77.5 107.5 137.5 167.5
K 55 155 255 355 455 555 X 22.5 52.5 82.5 112.5 142.5 172.5
L 60 160 260 360 460 560 Y 27.5 57.5 87.5 117.5 147.5 177.5
M 65 165 265 365 465 565 Z 32.5 62.5 92.5 122.5 152.5 182.5

Proposed revision[edit]

For US options, a new initiative, led by the Options Clearing Corporation, has been tasked with developing a new symbology for exchange traded options.[1] The proposed revision is meant to address several deficiencies with the standard convention described above. In particular:[1]

  • Lack of uniformity for LEAP option convention (i.e. options with maturity greater than one year)
  • Use of illogical identifiers for both options and underliers
  • Difficulties encountered when rolling LEAP options to standard options as they age.
  • Ambiguous naming, such as when options for both 105 strike and 205 strike exist on the same expiration for an underlier.

The new symbology will do away with the letter codes for strike and expiration, and instead employ a 21-byte series key with the following fields:[2]

  • Symbol (MSFT, max. 6 characters)
  • Yr (06)
  • Mo (03)
  • Day (18)
  • C/P (C)
  • Explicit Strike (00047)
  • Decimal (500)

All options that settle into the same underlier (e.g. 100 shares of the underlier) will share the same symbol field.[2]

Rollout of the new symbology convention is planned for 2009.[2]

References[edit]

  1. ^ a b "Symbology Initiative". Options Clearing Corporation. Retrieved 2007-06-04. 
  2. ^ a b c "Options Symbology Initiative" (PDF). Options Clearing Corporation. Retrieved 2007-06-04.