Options Symbology Initiative: The Infosys Approach
By July 31, 2009, all market participants must comply with the new options symbology method data. It will have a maximum of 21 characters as against five alpha characters. The Options Clearing Corporation (OCC) will also include the expiration day and decimal strike price as part of its standard production series contract.
Companies will have to transform their current IT infrastructure to comply with the new options guidelines.We recommend prioritizing Options Symbology Initiative (OSI) changes based on business impact, regulatory impact, operational risk and implementation effort. It is important that critical applications such as security master databases, applications interfacing with street side and market data vendors be changed first. Companies must also factor in dependencies on internal initiatives before prioritizing the impact.
We help firms migrate their systems to a new one, whether proprietary or third party. In case a member firm opts for a third party system, we conduct a vendor selection process to provide the firm with a shortlist. We also offer infrastructure support to maintain the members' systems in the long run.
An overview of the solutions we have on offer for specific challenges:
| Challenge |
Solution |
Benefits |
| Root symbol is inadequate for OTC
Securities expiration dates are incompatible |
Single option symbology for all standard option contracts
A new series key for naming standard option contracts |
Fewer errors in front, middle, back office processes
Reduction in corporate action symbol conversions
Reduction in the need to coordinate symbol elections between exchanges
|
| Symbols do not go well with short dated Option Contracts |
New naming guidelines for pre- and post-corporate action events with regard to FLEX options |
Elimination of WRAP symbols
Elimination of the LEAP rollover process
|
| No option for decimals in Strike Price |
Elimination of multipliers to represent listed index options in whole dollar strike intervals |
The initiative will provide coverage for 95% of the listed options and make handling options much easier.
The product scope will include equity options, index options, yield based options, short dated options, flex options and foreign currency option |
