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I've heard that the options industry and options exchanges are making changes to options symbols effective February, 2010.

What are the specific changes to stock option symbols? Why are the changes to stock option symbols being made? How will the changes affect individuals who trade (buy, sell, or write) stock options?

Are these changes for U.S. stock options only, or for other option markets as well?

Finally, where can definitive information on these changes be found?

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2 Answers 2

up vote 6 down vote accepted

The change is generally known as the Options Symbology Initiative (or "OSI") and there is a highly comprehensive guide to what occurred here.

The basic gist of what occurred was a shift FROM:

A coded system in which a shorter (3 to 5 letter symbol) could be used, but the symbols required a data source to determine what they meant. MSQ AD used to be a MSFT Jan 20 option, but you had to look up MSQ in a table to know that.

TO:

A system in which much longer symbols are needed, but they contain all the information required to identify a unique option: DELL 4.000 C 5/16/2010 isn't easy to type, but once you know how to read it, it's easy to see that it's an option on DELL, expiring on May 16th 2010, is a call (rather than a put,) and has a strike price of 4.

As to why they did it, there are a number of benefits, but most important reason is this one: they were running out of symbols. The number of permutations of 3-5 letter symbols had been exceeded by the number of options that had been listed, resulting in the need to "recycle" symbols. This meant that a current option symbol would be the same as an old one, in some cases on a different stock, which was wreaking havoc on historical data.

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Here is what I could find on the net:

http://education.wallstreetsurvivor.com/options-symbol-changes-coming-february-12th-2010

So it sounds like it does not affect how you invest in options but only how you look them up. I remember using a Bloomberg terminal and it wasn't clear what the expiry date of the option you were looking at was. It looks like the new quote system addresses this.

HTH.

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