The Option Symbol Format is Changing
Listed stock options have used the same format for over 25 years. The old format, which uses an option root plus a two character designation for month, put/call, and strike is being phased out in favor of a new symbol format.The new symbol format will overcome limitations and confusion which existed in the old format. The root symbol, strike, expiration date, and put/call indicator will be embedded directly in the symbol eliminating ambiguity. An indication of whether the option is non-standard will also be included in the new symbol format.
New Format
Consider the Walmart Feb 2010 42.50 Put. Using the old symbology, the symbol was WMTNV. It was difficult to determine the strike price of this contract or whether the contract was non-standard from the symbol.The new symbol format is:
| Root Symbol | Year | Month | Day | Put/Call | Strike Price | Decimal |
|---|---|---|---|---|---|---|
| WMT | 10 | 02 | 20 | P | 00042 | 500 |
| Root Symbol | Typically, the underlying symbol. Substitute symbols will be used for non standard settlement terms such as European settlement vs. American settlement and binary options. For non-standard options, the root symbol will be followed by a digit to indicate it is non-standard. |
|---|---|
| Year | The last two digits of the expiration year |
| Month | The expiration month, with a leading zero if necessary |
| Day | The expiration day of the month, with a leading zero if necessary |
| Put/Call | C = Call, P = PUT |
| Strike Price | The five digit whole part of the strike price, with leading zeros |
| Decimal | The 3 digit fractional part of the strike price, with trailing zeros |
When will the format be introduced?
Use of the symbol format will be mandatory for all market participants as of February 12, 2010. Many options data providers, including Optionistics, have voluntarily introduced the new format earlier. Use of the new symbology by Optionisitcs commenced on February 1, 2010.
Consolidation Period
In some cases, the new symbol format is not sufficient to distingush similar option contracts. In order to address this, the new symbology will be introduced in phases.In the first phase the root symbol for each contract will use the same root as the old option symbol. For example, the Microsoft Feb '10 27 P was MSQNB. The new pre-consolidation symbol will be:
The post-consolidation symbol will be:
Most standard option contracts are expected to be consolidated on Feb 12, 2010. Contracts that cannot be consolidated due to symbol conflicts, (e.g. as a result of corporate actions), will retain the pre-consolidation symbol and be phased out after they expire.
Binary Options
Binary Options will be treated as non-standard options. Unlike standard options, they will retain a special class symbol that designates them as binary. For example, the option symbol for the SPX Binary option is BSZ. Eventually, the wrap symbols BSK and BSF will convert to BSZ and the new symbol format will be:
| Contract Specification | Old Symbol | New Symbol | SPX Feb '10 800 Call | BSKBP | BSK 100220C00800000 |
|---|
Exercise Characteristics
Listed option contracts with different exercise characteristics will have different root symbols. Those symbols may or may not match the root symbol.Examples of exercise characteristics: