26 Option XYZ December 10 call XYZ December 110 call Part I: Basic Properties ol Stock Options Symbol XYZLB XYALB (wrap symbol is XYA) Note that the wrap symbol now allows the usage of Bin its standard interpretati<,n once again. This process can be extended. Suppose that, by some miracle, this stock rose to 205 prior to the December expiration. Things like this happened to Yahoo (YHOO), Amazon (AMZN), Qualcomm (QCOM), and others during the 1990s. If that hap­ pened, the exchange would now create another wrap symbol and use it to designate strike prices from 205 to 300. Suppose XYZ traded up to 210, and the exchange then said that YYA would now be the wrap symbol for the higher strikes. In that case, these symbols would exist: Option XYZ December 10 call XYZ December 110 call XYZ December 210 call Symbol XYZLB XYALB (wrap symbol is XYA) YYALB (wrap symbol is YYA) Note that there doesn't have to be any particular relationship between the wrap sym­ bols and the stock itself; any three-character designation could be used. LEAPS SYMBOLS A LEAPS option is one that is very long-term, expiring one or more years hence. Consequently, the expiration month codes encounter a problem with LEAPS similar to the one seen for striking price codes where wraps are concerned. The letter A stands for January as an expiration month code. However, if there is a LEAPS option on this same stock, and that LEAPS option expires in January of the next year, the letter A cannot be used to designate the expiration month of the LEAPS option, since it is already being used for the "standard" option. Consequently, LEAPS options have a different base option symbol than the "standard" base option symbol. Example: The current year is 2001. The OCC might have designated that, for IBM, LEAPS options expiring in the year 2002 will have the option base symbol VBM, and those expiring in the year 2003 will have the option base symbol WBM. Thus, the fol­ lowing symbols would be used to describe the designated options: