The option ticker explains four main things about the option: 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. 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. 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: By looking at the option ticker, we now know that it is a Sept. 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.
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. Dictionary Term Of The Day. A conflict of interest inherent in any relationship where one party is expected to Broker Reviews Find the best broker for your trading or investing needs See Reviews.
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Become a day trader. What do all of the letters in a stock option ticker symbol mean? By Investopedia Staff Share. Here is a visual breakdown of an Oct. 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: For further reading, see our Option Basics Tutorial.
Learn how the strike prices for call and put options work, and understand how different types of options can be exercised Understand how options may be used in both bullish and bearish markets, and learn the basics of options pricing and certain Learn about investing in put options and the associated risks. Explore how options can provide risk, which is precisely defined Learn about how the difference between in the money and out of the money options is determined by the relationship between As a quick summary, options are financial derivatives that give their holders the right to buy or sell a specific asset by Learn about the strike price of an option and how to set a strike price for call and put options depending on risk tolerance Learn more about stock options, including some basic terminology and the source of profits.
Stock tickers can say a lot about a company in just a few letters. Find out how to read them. Trading options is not easy and should only be done under the guidance of a professional.
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