Do Options Have CUSIPs? An Explanation of Identifiers

Financial instruments require clear identification for efficient and accurate market transactions. Standardized codes provide this clarity for many traditional investments, helping market participants track, trade, and settle securities effectively.

Understanding CUSIPs

A CUSIP, or Committee on Uniform Securities Identification Procedures, is a nine-character alphanumeric code that uniquely identifies North American financial securities. This identifier facilitates the clearing and settlement of trades. The CUSIP system, owned by the American Bankers Association (ABA) and operated by FactSet Research Systems Inc., streamlines investment transactions.

A CUSIP number’s structure reveals details about the security. The first six characters, the CUSIP-6, identify the issuer (e.g., a company or government entity). The seventh and eighth characters identify the specific security issue, differentiating types like common stock, preferred shares, or various bond maturities from the same issuer. The final ninth digit is a check digit, generated to verify accuracy and prevent record-keeping errors. CUSIPs are assigned to instruments including stocks, corporate bonds, municipal bonds, mutual funds, and certificates of deposit.

Understanding Options Contracts

An options contract is a derivative financial instrument that provides the buyer with a right, but not an obligation, to buy or sell an underlying asset at a specified price, known as the strike price, on or before a particular date, the expiration date. Options derive their value from an underlying asset, which can be a stock, an exchange-traded fund (ETF), or an index.

There are two types of options: call options and put options. A call option grants the holder the right to buy the underlying asset, typically used when an investor expects the asset’s price to increase. Conversely, a put option gives the holder the right to sell the underlying asset, generally purchased when an investor anticipates a price decrease. These contracts are agreements between two parties, detailing the underlying security, strike price, and expiration date.

CUSIPs and Options: The Direct Answer

Options contracts do not have CUSIPs like stocks or bonds. CUSIPs are designed for standardized, long-lived securities representing ownership or debt. Options are highly customizable and short-lived contracts with numerous variations in strike prices and expiration dates, making a fixed CUSIP system impractical.

However, CUSIP Global Services (CGS) now includes CUSIP identification for certain listed equity, ETF, and index options. A nine-character CUSIP is assigned to these options, with the third position indicating if it is a call option, a put option, or a single stock future. This offering streamlines pre- and post-trade reporting requirements and simplifies back-office operational processes for market participants.

How Options Are Identified

Since options do not use CUSIPs as their main identifier, a different standardized system distinguishes each contract. The Options Clearing Corporation (OCC), the central counterparty and guarantor for all listed U.S. options, developed a standardized symbology for this purpose. This system combines several components into a unique identifier, often called the OCC Option Symbol.

The OCC Option Symbol includes four pieces of information:
The underlying asset’s ticker symbol, such as AAPL for Apple Inc.
The expiration date of the contract, usually in a six-digit format (YYMMDD).
The option type, specified as either a “C” for a call option or a “P” for a put option.
The strike price, incorporated into the symbol, often represented as the price multiplied by 1000 and front-padded with zeros to a specific length.

For example, an option symbol like SPX 141122P00019500 indicates a put option on SPX, expiring on November 22, 2014, with a strike price of $19.50. This comprehensive symbology allows for precise identification and efficient trading of the vast number of available options contracts.