Trading Options

Scottrade Customers: Option symbols will be converted to a new system beginning Jan. 22. Scottrade will cancel all open option orders after market close on Friday, Jan. 22, 2010.

Option symbols are currently represented by six or fewer characters, depending on the number of letters in the symbol of the underlying security.

1. The first three letters represent the underlying security. Some underlying securities may be represented by fewer than three letters if their ticker symbol has fewer than three.

2. The second to last letter represents the expiration month and identifies whether it is a put or a call:

3. The last letter represents the strike price:

So, for example, the symbol representing fictional stock XYZ May 2009 90 Call would be XYZER.

Option Symbol Conversion

Beginning in February 2010, the financial services industry will be transitioning to a new symbol format that makes options symbols more descriptive and exact. The current system poses several limitations to the industry, and the new symbology created by the Options Clearing Corporation (OCC) is designed to be better equipped to accommodate current and future options products.

Scottrade will be transitioning to the new option symbology beginning Friday, Jan. 22. Please note that Scottrade will cancel all open option orders after market close on Friday, Jan. 22, 2010. This affects only option orders, and Scottrade will not be re-entering these orders. You may re-enter your order at your discretion once the conversion process is complete.

The new OCC options symbols are made up of 17 to 21 characters, depending on the length of the symbol representing the underlying security. Symbols are constructed as follows:

Symbol + Expiration Date (Year, Month, Day) + Call or Put + Strike Price (in dollars to 3 decimal places)

In the following example, you'll see the breakdown of an option symbol for fictional stock XYZ and how many characters are devoted to each part of the symbol: View Graphic

OCC Option Symbol: XYZ 100320C00027500

XYZ - Symbol (up to 6 characters)

10 - Year (2 characters)

03 - Month (2 characters)

20 - Day (2 characters)

C - Call/Put (C or P)

00027 - Strike Dollar (5 characters)

500 - Strike Decimal (3 characters)

The new symbology will be implemented for equity options, yield-based options, short-dated options, exchange-listed flexible (Flex) options and Long-Term Equity Anticipation Securities (LEAPS).

New Symbols at Scottrade

To keep things simple, the option symbols you see on our trading tools, confirmations and statements, transaction history, watch lists and alerts will be shorter and easier to read than the complete OCC symbols.

Given the same example as above, a call contract for XYZ with a strike price of $27.50 and an expiration of March 20, 2010, you will see the following symbol used by Scottrade: View Graphic

Scottrade Symbol: XYZ 27.50 MAR 10 C

XYZ - Symbol

27.50 - Strike Price

MAR - Month

10 - Year

C - Call/Put

On your Positions page, you'll see this symbol along with a more detailed description: CALL-XYZ CORP MAR 27.500 03/20/2010. Clearer symbols and detailed descriptions are included to help you better track your options positions.

You'll see the simple Scottrade options symbols on our trading tools, confirmations & statements, transaction history, watch lists and alerts. This will be paired with the OCC symbol on your confirmations, statements and transaction history. You will see only the OCC symbol used on your tax statements.

If you have questions about reading current or new option symbols, please contact your branch office.

Options involve risk and are not suitable for all investors. Detailed information on our policies and the risks associated with options can be found in the Scottrade Options Application and Agreement, Brokerage Account Agreement, and by downloading the Characteristics and Risks of Standardized Options and Supplements (PDF) from The Options Clearing Corporation, or by requesting a copy from your local branch office. Market volatility, volume, and system availability may impact account access and trade execution. Supporting documentation for any claims will be supplied upon request.