Option naming convention

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

Standard convention

In North America the usual naming convention is as follows:

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

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

Code	Strike Prices						Code	Strike Prices
A	5	105	205	305	405	505	N	70	170	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

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

1. ^ ^{a b} "Symbology Initiative". Options Clearing Corporation. http://theocc.com/initiatives/symbology/default.jsp. Retrieved 2007-06-04. 
2. ^ ^{a b c} (PDF) Options Symbology Initiative. Options Clearing Corporation. http://theocc.com/initiatives/symbology/symbology_initiative_v1_3.pdf. Retrieved 2007-06-04.