Options Education - The Fundamentals
How are option contracts identified?
In the same way that each individual stock has its own unique ticker symbol, each option contract is also identified by a unique combination of five letters. The first three letters of an option symbol always describe which stock the contract is associated with, and the next two letters identify the month and strike price of the contract based on the following system (note that the symbol associated with the month also reveals whether the contract is a put or a call):
Month |
for Calls |
for Puts |
Jan |
A |
M |
Feb |
B |
N |
Mar |
C |
O |
Apr |
D |
P |
May |
E |
Q |
Jun |
F |
R |
Jul |
G |
S |
Aug |
H |
T |
Sep |
I |
U |
Oct |
J |
V |
Nov |
K |
W |
Dec |
L |
X |
|
Code |
Strike Price |
A |
5 |
105 |
B |
10 |
110 |
C |
15 |
115 |
D |
20 |
120 |
E |
25 |
125 |
F |
30 |
130 |
G |
35 |
135 |
H |
40 |
140 |
I |
45 |
145 |
J |
50 |
150 |
K |
55 |
155 |
L |
60 |
160 |
M |
65 |
165 |
N |
70 |
170 |
O |
75 |
175 |
P |
80 |
180 |
Q |
85 |
185 |
R |
90 |
190 |
S |
95 |
195 |
T |
100 |
200 |
U |
7.5 |
37.5 |
V |
12.5 |
42.5 |
W |
17.5 |
47.5 |
X |
22.5 |
52.5 |
Y |
27.5 |
57.5 |
Z |
32.5 |
62.5 |
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For example, the three letter symbol for Celgene options is LQH, so the symbol for a "Celgene April 65 Call" is LQHDM (where "D" tells us it is an April call, and "M" tells us the strike price is 65). Similarly, a "Celgene July 45 Put" would be LQHSI.
Occasionally, in addition to their regular option symbol, stocks will also be assigned additional 3-letter codes for their options. This sometimes occurs when there has been a stock split for the company, and it often happens if LEAPS (see below) are available to be traded on the stock (note: given the myriad of symbols sometimes available, it is a good idea to always triple-check your entries when placing option trades!).
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