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
Options Clearing Corporation (OCC) is a United States clearing house based in Chicago. It specializes in equity derivatives clearing, providing central counterparty (CCP) clearing and settlement services to 16 exchanges. It was started by ...
, 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.
Old convention
Prior to 2010,
standard equity option naming convention in North America, as used by the Options Clearing Corporation, was as follows:
For example, an Apple Inc AAPL.O call option that would have expired in December 2007 at a $122.50 strike price would be displayed as APVLZ in old convention (AAPL071222C00122500 in new convention).
Stock option names are written in the following format: SYMBOL+MONTH+STRIKE
*SYMBOL = Option Root Symbol, normally the stock's
ticker symbol
A ticker symbol or stock symbol is an abbreviation used to uniquely identify publicly traded Share (finance), shares of a particular stock or Security (finance), security on a particular stock exchange. Ticker symbols are arrangements of symbols ...
*MONTH = Month the option expires
*STRIKE = Strike price
Expiration Month Codes
Strike Price Codes
References
{{Derivatives market
Investment
Option naming convention