ALERT - OPTION SYMBOL CHANGE!!

STOCK OPTION SYMBOL FORMATS CHANGED FEB 12, 2010

We thought our stock option trading system would be immune to it, but it turns out that there are a number of changes that throw a monkey wrench in our tracking systems. Basically the CBOE is going to a system that will eliminate the 3-5 digit codes that is used to identify all options today and instead produce a name which will run 19-21 letters and numbers for each and every option. (We will actually have it worse...we will have up to 44 characters to juggle for each contract)

In some ways this will make it easier, at a glance, to know what specific stock, option, strike, expiration and Put/Call you are looking at, but it means looking up a specific option will become much more difficult. For our programmers it is a bit of a nightmare. All of the major brokers attempted to get the time frame extended for switchover, but Options Board has said no and February 12 will be the day. To make matters worse, there will be a "consolidation" period where the symbol will be a hybrid of old and new until May when all old symbols will disappear. securities traders may not recognize their options any longer.
That's when ticker symbols for listed options will expand from as few as three characters to as many as 21 numbers and letters.

The 21-character symbols being spearheaded by the Options Clearing Corp. (OCC)--the clearinghouse for U.S. listed options--will be introduced in February 2010. The current three- to five- character codes will be completely eliminated in May.

While in effect for over 30 years, the current identification codes don't provide sufficient information on underlying securities and cannot accommodate newer types of options such as long-term equity anticipation options (Leaps) and flexible exchange (Flex) options. according to the OCC, which has spearheaded the so-called Options Symbols Initiative (OSI) since 2005.

Of the maximum 21 characters in the new code, the first six characters will represent an option contract's symbol; two characters each for the maturity day, month and year; one for the call or put indicator; five for the strike dollar; and three for the strike price. Today, listed options are named using as many as five characters. Of those five, three characters indicate the root symbol for the option and two characters identify the expiration month, whether it's a put or a call and the strike price for the option.

Let's say that we were going to buy Here is an example of what it will look like:

The basic parts of new stock option symbol are: Root symbol + Expiration Year(yy)+ Expiration Month(mm)+ Expiration Day(dd) + Call/Put Indicator (C or P) + Strike price

Symbol - One to six symbol for the underlying security (e.g. INTC)
Year of Expiration - Two characters representing expiration year
Month of Expiration - Two characters representing expiration month
Day of Expiration - Two characters for the expiration day
Call/Put Indicator - One character for Call(C) or Put(P)
Strike Price - One to nine characters for the strike price, including a decimal character if needed