Add training workflow, datasets, and runbook
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24 Part I: Basic Properties ol Stock Options
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THE STRIKING PRICE CODE
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This is also a one-character symbol, designed to identify the striking price of the
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option. Things can get ve:iy complicated where striking price codes are concerned,
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but simplistically the designations are that the letter A stands for 5, B stands for 10,
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on up to S for 95 and T for 100. If the stock being quoted is more expensive - say,
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trading at $150 per share - then it is possible that A will stand for 105, B for 110, S
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for 195 and T for 200 (although, as will be shown later, a more complicated approach
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might have to be used in cases such as these). It should be noted that the exchanges
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- who designate the striking price codes and their numerical meaning - do not have •
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to adhere to any of the generalized conventions described here. They usually adhere
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to as many of them as they can, in order to keep things somewhat standardized, but
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they can use the letters in any way they want. Typically, they would only use any strik
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ing price code letter outside of its conventional designation after a stock has split or
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perhaps paid a special dividend of some sort.
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Before getting into the more complicated option symbol constructions, let's
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look at a few simple, straightforward examples:
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Stock Stock Symbol Description Option Symbol
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IBM IBM IBM July 125 call IBMGE
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Cisco csco Cisco April 75 put CYQPO
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Ford Motor F Ford March 40 call FCH
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General Motors GM GM December 65 put GMXM
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In each option symbol, the last two characters are the expiration month code and the
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striking price code. Preceding them is the option base symbol. For the IBM July 125,
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the option symbol is quite straightforward. IBM is the option base symbol (as well as
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the stock symbol), G stands for July, and E for 125, in this case.
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For the Cisco April 75 put, the option base symbol is CYQ (this was given in the
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previous table, but if one didn't know what the base symbol was, you would have to
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look it up on the Internet or call a broker). The expiration month code in this case is
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P, because P stands for an April put option. Finally, the striking price code is 0, which
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stands for 75.
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The Ford March 40 call and the GM December 65 put are similar to the oth
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ers, except that the stock symbols only require one and two characters, respectively,
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so the option symbol is thus a shorter symbol as well - first using the stock symbol,
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then the standard character for the expiration month, followed by the standard char
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acter for the striking price.
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