Option symbols are going away…
That’s right, stock options symbols as we’ve known them are going away. Beginning on February 12, 2010 the current option symbols will be replaced with new stock option symbols. The change is nothing to be scared about — not nearly as scary as Dorothy’s lions and tigers and bears.
Old vs. New…
The old stock options symbols were contained in 3-to-5 characters. The new symbols will be generated with 9-to-22 characters.
The old stock options symbol format consisted of:
- Option Root – One to three characters representing underlying stock
- Month of Expiration & Call/Put – One character representing month of expiration & call/put
- Strike Price – One character representing the strike price
|Month of Expiration &
The call option symbol would be entered, traded and listed as NQAW.
The new stock options symbol contains the following components:
- 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
For Intel example as discussed above, the new symbol structure would look like:
New Symbol Structure…
The option symbol using the new format would be:
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Complicated – Not Really…
Wow, the new stock options symbols seem a lot more complicated than the old symbols, but PowerOptions is changing its tools to make using the new symbols very easy.
We’ll illustrate entering a covered call position into PowerOptions’ portfolio tool to show you how easy it is. A user would select the “My Portfolio” tab, the portfolio of interest and the strategy in the usual manner. We’ll enter a covered call position for the Intel example discussed above.
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The covered call entry page shown below is then displayed to the user:
After entering the stock symbol, INTC for this example, and choosing “Select Option”, the user is prompted with the following pop-up shown below:
A user seeking an option with a February expiration would click “Feb 20, 2010 (37 Days)”, as shown below, for example.
For our Intel example, we want a covered call with an expiration month of January and a strike price of $17.50, so we would select 17.50 from the available choices as shown below:
After selecting the desired stock symbol and call option, a user would be presented with the following screen:
The entered stock symbol and the selected option are now displayed as shown above.
A user would enter the # of shares, # of contracts, commissions/fees and then select “Submit”, after which the following would be displayed:
The format for the portfolio display is very similar to the old format, but you will notice the column previously labeled as “Issue Symbol” has been renamed “Security” and an option symbol is not displayed as was displayed previously.
We hope the change from the old option symbols to the new entry format is easy and painless for you. The stock option brokers are also transitioning to the new entry format and revising their tools as needed. Hopefully, we can all click our heels together like Dorothy during the symbol changeover and everything will work smoothly.
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[tags] symbol, brokers, INTC, Intel Corp. [/tags]