Cl,apter 1: Definitions 23 
OPTION SYMBOLOGY 
It is probably a good idea for an option trader to understand how option symbols are 
created and used, for it may prove to be useful information. If one has a sophisticat­
ed option quoting and pricing system, the quote vendor will usually provide the 
translation between option symbols and their meanings. The free option quote sec­
tion on the CBOE's Web site, www.cboe.com, can be useful for that purpose as well. 
Even with those aids, it is important that an option trader understand the concepts 
surrounding option symbology. 
THE OPTION BASE SYMBOL 
The basic option symbol consists of three parts: 
Option symbol = Base symbol + Expiration month code + Striking price code 
The base symbol is never more than three characters in length. In its simplest form, 
the base symbol is the same as the stock symbol. That works well for stocks with three 
or fewer letters in their symbol, such as General Electric (GE) or IBM (IBM), but 
what about NASDAQ stocks? For NASDAQ stocks, the OCC makes up a three-let­
ter symbol that is used to denote options on the stock. A few examples are: 
Stock 
Cisco 
Microsoft 
Qualcomm 
Stock Symbol 
csco 
MSFT 
QCOM 
Option Base Symbol 
CYQ 
MSQ 
QAQ 
In the three examples, there is a letter "Q" in each of the option base symbols. 
However, that is not always the case. The option base symbol assigned by the OCC 
for a NASDAQ stock may contain any three letters (or, rarely, only two letters). 
THE EXPIRATION MONTH CODE 
The next part of an option symbol is the expiration month code, which is a one-char­
acter symbol. The symbology that has been created actually uses the expiration 
month code for two purposes: (1) to identify the expiration month of the option, and 
(2) to designate whether the option is a call or a put. 
The concept is generally rather simple. For call options, the letter A stands for 
January, B for February, and so forth, up through L for December. For put options, 
the letter M stands for January, N for February, and so forth, up through X for 
December. The letters Y and Z are not used for expiration month codes.