What is OSI?
The Options Symbology Initiative (“OSI”) is a comprehensive plan to replace the existing archaic option root identification method for exchange-listed option contracts with a 21-character symbol containing the underlying stock symbol, expiration date (including the day), a call/put identifier and the strike price.
Why is this necessary?
The current OPRA-based (Option Price Reporting Authority) methodology has resulted in a number of complexities and errors between front and back-office processing. This should alleviate those errors and also eliminate the need for the LEAP (Long-term Equity Anticipation Security) rollover process.
So what will the new symbols look like?
Following is an example of how the new symbols will be reflected in your downloads from your broker.
The new symbology should facilitate easier identification of option trades and corresponding opening and closing transactions.
Note: Some data providers do not include a closing option transaction (BTC or STC) in their downloads upon expiration ... the option just disappears. A closing transaction needs to be generated so that the opening transaction will not be recognized as “Open” at year-end.
For the do-it-yourselfers, I have developed a template that will recognize and add a closing transaction for your unmatched open position upon expiration.
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