Dawn Pennington

   

If you've visited your broker's Web site or checked out one of the various financial sites where you can look at the options available on a particular stock, you've probably noticed that each option has a different ticker symbol.

While at first glance it might look like alphabet soup to you, believe it or not there's a methodical naming convention that goes along with each option.

The first few symbols of an options ticker are considered to be its "root." This is typically the stock symbol or some variation thereof.

If you told a professional trader that you were thinking about trading the H-E-T-J-N options, he or she might know immediately that you were looking at the Harrah's (HET) October $70 Calls.

Now, you can probably tell that the "HET" root is in the option ticker, but what might have eluded you until now is that the remaining "J-N" combination literally does stand for "October" and "$70." I'll show you how.

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The next-to-last letter in an options ticker is the expiration month. Both calls and puts have their own expiration month codes (that is, 12 single-letter codes for calls and 12 for puts, to cover a year).

The letters A through L represent call options (where, A equals a January call, B equals a February call, L equals a December call, etc.).

Puts are denoted by the letters M through X (M equals a January put, T equals an August put, V equals a November put).

The letters Y and Z aren't used here because we only need enough letters to cover 24 months and we didn't need letters 25 and 26 in the alphabet in this section.

However, you will see the Y and Z pop up in the strike price code, which is the final letter in an options ticker.

The strike price codes are a little trickier to remember, as these can change if there's a stock split and the strike prices are reassigned.

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