In financial markets, an option naming convention is a method of identifying which of many possible options is being quoted or traded.
Standard Equity Option Convention
US equity options, typically cleared by the Options Clearing Corporation, underwent an initiative between 2008 and 2010 to change the standard symbology. The proposed revision was meant to address several deficiencies with the old standard convention described below. In particular:
- 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 does away with the letter codes for strike and expiration, and instead employ a 21-byte series key in the style of Root symbol (ticker symbol) + Expiration Year (yy) + Expiration Month (mm) + Expiration Day (dd) + Call/Put Indicator (C or P) + Strike Price:
- Symbol (max. 6 characters)
- Yr (YY)
- Mo (MM)
- Day (DD)
- Call or Put (C/P)
- Strike Price (#####.###) listed with five digits before the decimal and three digits following the decimal
For Example, an April 16, 2015 $30.00 Call Option on Yahoo would be listed as “YHOO150416C00030000”.
All options that settle into the same underlier (e.g. 100 shares of the underlier) share the same symbol field.
Prior to 2010, standard equity option naming convention in North America, as used by the Options Clearing Corporation, was 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
Strike Price Codes
|Code||Strike Prices||Code||Strike Prices|
- ^ Jump up to:ab Moon, Angela. “Options trading to simplify with new symbols: OCC”. U.S. Retrieved 2018-09-27.
- ^ Jump up to:ab c d “Symbology Initiative” (PDF). Retrieved 27 September 2018.
- ^“How to read an option symbol”. help.yahoo.com. Retrieved 2018-09-27.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.