Option symbology is long overdue a cleanup, it will be interesting to watch how many institutions take up the OCCs Option Symbology Initiative. We’ve long been restricted in the ability to identify and process exchange listed option contracts. Typically a three to five alpha character representation is used. The first one to three characters identify the option root symbol and the remaining two alpha characters identify the expiration month, call/put indicator and strike price (IBMER = IBM May 2006 90 call).
This method has been used for over 25 years and poses several limitations in today’s marketplace. The limitation of three characters to represent the option root creates inconsistency with OTC securities and has resulted in the use of illogical identifiers in both the options and underlying securities markets. The month and call/put codes assume expiration occurs in the following sequential month and assumes a single expiration day.
SunGards offering is a start but it needs take-up across the board to push-out the limited old-style of option symbols.
Full story on BobsGuide:
http://www.bobsguide.com/guide/news/2009/Sep/16/SunGard%e2%80%99s_Brokerage_and_Clearance_Solutions_Primed_for_Options_Symbology_Initiative.html
