Reading and Getting Stock Option Quotes

Before you start trading, you must know the basics on how to read Stock Option Quotes. This skill is very essential to have a good game in trading. Mastering your skill in trading involves great effort on learning the basic of the game.

Stock option quotes are available in all sources. These quotes may look different with each other. Quotes vary according to the company where the stock quoted belongs. The name of the company is sometimes abbreviated.

Looking at your newspaper, in the stock exchange page, you will notice that the exercise price or the strike price and the expiration date follow the company’s name. The last entry includes the last trade whether it is a call or a put. The volume of the last trade is also included.

You must be aware of the quote units being used Stock Option. Actually, the unit used in Stock Option is the monetary unit of money. For example, in Japan’s trading, they use the Japanese Yen.

Not all of the currencies are involve in Stock Option. Only those major players in stock exchange are known internationally. Here are some of the major players in stock option:

• The Dollar – the monetary unit of the United States. The dollar is the standard unit being used in the international stock exchange.
• The Euro – this is the monetary unit of the countries member of the European Union excluding United Kingdom.
• The Japanese Yen – as one of the major players in international stock exchange, Japans money is included.
• The Sterling – United Kingdom’s monetary unit.
• The Aussie – slang for the Australian Dollar.
• Gold – this is represented in ounce (oz.)

An option quote is made up of symbols. The symbols represent the expiration date and the strike price or also known as exercise price. Symbols are used for security purposes.

Exchange-listed option symbol cannot exceed three letters. In some cases, the stock trading symbol for listed securities and the option symbol do not differ. In NASDAQ, the option symbols are usually different from its trading symbols.

For instance, XZZ Corporation has a symbol of XZZC. Its option symbol will be XZC. In this kind of symbolisms, you must start with the option-trading symbol, which is the XZC for you to find the quote for the options on that Corporation.

Remember that the letters represents the expiration date and the strike price. Traders uses standard chart to rename the months and the strike prices from multiple character to singular.

For example, a stock which will expire on January will be “A”. “A” is assigned to replace January in the Stock Option Quote. Using the XZZ Corporation as an illustration, for example the expiration date for the stock of the said corporation will be on January and the strike price is at five, the corresponding symbol would be, XZZCAA.

The corresponding letters are divided into two. That is for the calls and the puts. For the calls, the letters A to L is assigned for the months January to December respectively. For the puts, the letters M to X is assigned for the same chronology as in the call options.

Strike Price is divided in fives. That is from 5, 10, 15, so on, and so forth until 100. 

The letters A to T is assigned consecutively to the price. That is A to 5, B to 15 and so on. Letters U to Z are for indefinite stock price ranging from 7.5 to 32.5. Take note that 5, 105, 205 and 305 is equivalent to the letter A.

All this information is very essential for beginners in trading. Bear in mind that investing in Stock Option is not that easy and very delicate. You have only two choices, to gain or lose.

Knowing the basics properly will give you idea on how to trade effectively and efficiently.