A:

The option ticker explains four main things about the option: the underlying stock, whether it is a call or a put option, the expiration month and the strike price. An option ticker is quoted by a series of letters. This is a lot of information crammed into one ticker, but we can help you decode option ticker symbols.

Option Ticker Structure
An option ticker can be broken down into three parts. The first part of the option ticker is the option symbol, which can vary in letter length. Typically, this symbol will be found on all the options of the company and will be identical to the stock symbol. However, this is not an absolute. For example, Microsoft's ticker is MSFT, while its option symbol is quoted as both MSQ and MFQ. The second part of the option ticker is the expiration date and the call or put classification of the option, and it consists of a single letter. There are 12 possible expiration periods for options - one per month. Options classified from A to L are call options and M to X are put options. The third part to the option ticker is the strike price of the option, and this is also a single letter. Because there is a wide range of potential strike prices and a limited number of letters, each letter represents more than one strike price. This creates the need for a bit of guesswork, but nothing overly complex.

Here is a visual breakdown of an Oct. 05 35.00 Merck Option:

optionticker1.gif

To help you decode any option ticker, we are providing you with a code sheet:

Now that you have your option ticker code breaker, let's try an example:

GMIU - The last two letters provide information pertaining to the terms of the contract. This leaves the other two letters as the option symbol (GM). Again, the second part of the ticker (I) explains the month of expiry and whether it is a call or a put. Looking at the above chart, we see that this is a call option that expires in September. The third part (U) is a bit trickier: if we know that this is a General Motors option and the current stock price is $31.50, we can easily find that the strike price of this option is $37.50. By looking at the option ticker, we now know that it is a Sept. 37.50 GM call option.

When it comes to the strike price, it is important to remember that strike prices for most options do not vary a great deal from the current stock price. For example, it is rare that you would be able to purchase an option with a strike price of $500 that has a stock price of only $15.

Be warned that in the event of stock restructurings, like five for seven stock splits or mergers, there may be no way to use the codes above to find out information about the option. If such a restructuring occurs, the exchange on which the option is traded will change the option ticker symbol accordingly.

For further reading, see our Option Basics Tutorial.

RELATED FAQS
  1. Why do all mutual fund tickers have an X at the end?

    It's true that all mutual funds' tickers have an X at the end of their symbol. The reason for this is to distinguish between ... Read Answer >>
  2. What is a stock ticker?

    A stock ticker is a report of the price for certain securities, updated continuously throughout the trading session by the ... Read Answer >>
  3. Do hedge funds have ticker symbols?

    Discover whether or not hedge funds have ticker symbols, where you can find ticker symbols and the significance of a ticker ... Read Answer >>
  4. How do I change my strike price once the trade has been placed already?

    Learn how the strike prices for call and put options work, and understand how different types of options can be exercised ... Read Answer >>
  5. How are call options priced?

    Learn how aspects of an underlying security such as stock price and potential for fluctuations in that price, affect the ... Read Answer >>
  6. Do options make more sense during bull or bear markets?

    Understand how options may be used in both bullish and bearish markets, and learn the basics of options pricing and certain ... Read Answer >>
Related Articles
  1. Trading

    Keeping Securities Clear With Ticker Symbols

    A ticker symbol is a group of characters that represent a specific, publicly traded security that’s listed on an exchange.
  2. Insights

    The Evolution Of Ticker Symbols

    The stock market has changed dramatically since its inception, but the use of ticker symbols has remained largely unchanged.
  3. Trading

    Getting Acquainted With Options Trading

    Learn more about stock options, including some basic terminology and the source of profits.
  4. Trading

    A Newbie's Guide To Reading An Options Chain

    Learning to understand the language of options chains will help you become a more informed trader.
  5. Investing

    Understanding The Ticker Tape

    We explain the meaning and use of that reel of symbols whizzing across your TV or computer screen.
  6. Trading

    Three Ways to Profit Using Put Options

    A brief overview of how to profit from using put options in your portfolio.
  7. Trading

    Stock Options: What's Price Got To Do With It?

    A thorough understanding of risk is essential in options trading. So is knowing the factors that affect option price.
  8. Trading

    Google Stock Too Expensive For You? Try Options

    Investing in Google (GOOG) generally requires you to pay the price of the share multiplied by the number of shares bought. An alternative using lesser capital involves using options.
RELATED TERMS
  1. Ticker Symbol

    An arrangement of characters (usually letters) representing a ...
  2. In The Money

    1. For a call option, when the option's strike price is below ...
  3. OEX

    The ticker symbol used to identify index options traded on the ...
  4. Stock Option

    A privilege, sold by one party to another, that gives the buyer ...
  5. Ticker Tape

    A computerized device that relays financial information to investors ...
  6. Out Of The Money - OTM

    A call option with a strike price that is higher than the market ...
Hot Definitions
  1. Smart Home

    A convenient home setup where appliances and devices can be automatically controlled remotely from anywhere in the world ...
  2. Efficient Frontier

    A set of optimal portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a ...
  3. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  4. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the ...
  5. Border Adjustment Tax

    A tax levied on goods based on where they are sold – exported goods are exempt from tax; those imported and sold in the ...
  6. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and expenses incurred during a specified period of time, usually ...
Trading Center