Option Symbols and Expiration Cycles

The stock option symbol consists of 19 characters, all letters or numbers, which include the following information:

Let’s take as an example a historical April $21 Call for Intel Corporation (INTC), the symbol for which is built like this:

     Figure 2.8

New Option


INTC 100416C00021000
4 Elements


2 3


Expiration Day Call/Put
Strike Price
Strike Price
INTC 11 04 16 C 00021 000

Pure poetry, no? Be aware that every broker may have its own nomenclature for entering option symbols, although they all should allow entry of the industry standard format shown above. Be sure you understand the new symbol structure! At this writing, Yahoo.com option chains feature the full option symbol in this format but eliminate the space following the stock symbol.

One-Point (“Dollar”) Strikes

At this writing, quite a few stocks have One-Point strike prices in one-dollar increments, such as $11, $12, $13, $14, $15, $16, $17, $18 and $19 for all expiration months except January. The options for January, which begin as LEAPS, have the older standard strike prices, usually $2.50, $5.00 or $10 apart, depending on stock price. One-point strikes have become common for liquid stocks with liquid options.

Note that stocks only have dollar-strike options when the options are fairly liquid, since there is no point in dollar-strikes if there is not enough demand for the options. Stocks with strike prices $2.50 or $5.00 apart tend to have less liquid options; indeed, this is a signal of lower option liquidity.

However, we often see both strikes for the same underlying stock. For example, a stock may be priced at $41 and have dollar-strikes through $45, but the strikes above $45 may be $2.50 or $5.00 apart. If the stock price advances, dollar strikes can be added, if demand warrants.

The New Weekly Options

The Securities and Exchange Commission has approved a program for Weekly options, which are stock options that are identical to the monthly-expiring stock options except for their shorter life and different expiration dates. The new Weekly options begin trading on Thursday and expire on the Friday (not on Saturday) of the following week, thus they only trade for 7 business days. There are no Weekly options for the weeks during which the monthly options expire.

Weekly options are identified by their expiration date. If the monthly options expire on April 16, (a Saturday), then AAPL could for example have Weekly options expiring in the other weeks in April; namely, 4/1, 4/8, 4/22 and 4/29 (all Fridays).

Weekly options behave much the same as monthly options, mimicking the behavior of monthly options in the last week before monthly expiration.

The pilot program allows only 40 classes to have Weekly options, including options on ETFs. The roster of underlying stocks and ETFs changes each week, though some stalwart companies (e.g., AAPL, MSFT) have Weekly options available consistently.

For a stock that has Weekly options available, be sure you are not writing the Weekly option unless that is your intention. Option chains typically present the Weekly options first, then the monthly-expiring options below them.

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