When listing call options in London, you need to keep a few key things in mind. First and foremost, all calls need to be listed on the London Stock Exchange (LSE). Secondly, each option contract will have its unique identifier, which comprises the underlying security’s ticker symbol and year’s expiration month. Finally, you’ll need to specify the option’s strike price when listing it.
Let’s look at each of these listing requirements in turn.
All calls need to be listed on the LSE
The London Stock Exchange is the primary exchange for trading options in the UK. All call options must be listed on this exchange to be traded.
Each option contract will have its unique identifier
Since each call option contract is a unique financial instrument, it will have its unique identifier. This identifier comprises the underlying security’s ticker symbol and the expiration month and year. For example, the identifier for a call option on ABC PLC with a May 2021 expiration would be ABC-MAY21-C.
You need to specify the strike price of the option when listing it.
When you list a call option on the LSE, you’ll need to specify the strike price to exercise the option. The strike price is typically quoted in pounds sterling per share. For example, if you’re listing a call option with £5 per share, you would specify ‘5’ as the strike price.
The option contract will also have a ‘premium’.
In addition to the strike price, the option contract will also have a premium. The premium is the price that buyers of the option pay to the seller for the right to buy or sell the underlying security at the strike price. The premium is typically quoted in pounds sterling per share. For example, if you’re listing an option with a premium of £0.10 per share, you would specify ‘0.10’ as the premium.
You need to specify the expiration date of the option when listing it.
When you list a call option on the LSE, you’ll need to specify the option’s expiration date. The expiration date is when the option expires and can no longer be traded. The expiration date is typically quoted in ‘MM/DD/YYYY’ format. For example, if you’re listing an option with an expiration date of May 21, 2021, you would specify ‘05/21/2021’ as the expiration date.
You need to specify the ‘type’ of the option when listing it.
When you list a call option on the LSE, you’ll need to specify the ‘type’ of the option. The type of an option determines how you can exercise it. There are two main types of options: American-style and European-style. American-style options can be exercised up to the expiration date, while you can only exercise European-style options on the expiration date itself.
You need to specify the ‘size’ of the option when listing it.
In addition to the type, you’ll need to specify the ‘size’ of the option when you list it on the LSE. The size is the number of shares covered by the option contract. For example, if you’re listing a call option with a size of 100 shares, you would specify ‘100’ as the size.
You need to specify the ‘currency’ of the option when listing it.
When you list a call option on the LSE, you’ll need to specify the currency in which it is denominated. The vast majority of options traded on the LSE are denominated in pounds sterling. However, there are a limited number of foreign currency-denominated options available for trading. For example, if you’re listing a call option denominated in euros, you would specify ‘EUR’ as the currency.
You need to specify the ‘price’ of the option when listing it.
In addition to the strike price and premium, you’ll also need to specify the ‘price’ of the option when you list it on the LSE. The price is the total cost of the option, including both the strike price and premium. The price is typically quoted in pounds sterling per share. For example, if listing an option with a strike price of £5 per share and a premium of £0.10 per share, the price would be £5.10 per share.
For more info on call options, check out Saxo Bank.
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