Thanks to the Options Symbology Initiative (OSI), on February 12th 2010 the current system of how options quotes are being displayed will become officially obsolete. Options symbols will no longer be represented by a string of letters and instead will be written out.
From TradeKing’s recent press release, “For over 30 years, broker dealers, option exchanges and market data providers that trade and support option trading have met the challenge of identifying option contracts using 3 to 5 letter symbols. This standard symbol format identified the underlying security with the first 1-3 letters and the expiration month and strike price with the last 2 letters.”
Using letters to serve as options symbols is confusing and nearly impossible to interpret off hand (unless you are a pro of course). So why is the change only finally coming now?
According Options Symbology Initiative (OSI) page on the Options Clearing website, in 2005 the “OCC Board of Directors asked OCC staff to work with industry representatives in defining a reasonable time frame to eliminate the use of OPRA codes in the listed options markets.” OPRA means the current way of listing symbols. Bottom line this has been a long time coming.
(From TraeKing’s press release) “XYZ DE, in which the letters “XYZ” identify the company XYZ as the underlying stock (and not all options symbols currently have letters that resemble the symbol or name of their underlying stock), and the “D”, for those who know how to de-code the symbology, denotes that this is a Call option expiring on April 17 2010, with the “E” denoting that the strike price of the option is $125.00.
With the transition to the new options identification, all of that information would appear plain to see, as in this example: XYZ April 17, 2010 125.00 Call”
Several major industry players have apparently already updated their systems for the changes including Thomson Reuters, Etrade, Charles Schwab, and OptionsXpress amongst others.
All I can say is that it’s about time.
For more information, visit the Options Clearing website.