OPTION SYMBOLOGY INITIATIVE

INTRODUCTION

Beginning in 2006, working groups comprised of brokers, exchanges, clearing houses and vendors were formed in order to represent each of the U.S. and Canadian securities industries in a multi-year effort to develop a revised data format for representing listed option symbols. These efforts, referred to as the Option Symbology Initiatives (OSIs), are intended to provide the following benefits:
 
-         Decrease the number of errors in the front, middle and back office processes.
-         Represent the vast majority of listed option contracts using the same symbol as the
           underlying security to reduce investor confusion.
-         Reduce corporate action symbol conversions.
-         Eliminate wrap symbols.
-         Eliminate the need for LEAP rollover process.
-         Reduce the frequency of coordination among exchanges for symbol elections.
-         Support the growth in product listings through additional expiration events and more
           flexible strike price designations.
 
The following article provides background information regarding the products impacted by the OSI, the revised data format, project timeline and client impact as well as external links where additional information may be found.
 
PRODUCTS IMPACTED
The table below lists the product classifications of the US and Canadian exchange listed options which are impacted by the OSIs.  Note that while the mandated conversion date for Canadian options is identical to that of the US (i.e., February 12, 2010), the conversion of Canadian options was accelerated and completed by IB in September 2009.
 
US
Canadian
Equity
Equity (short cycle, regular full cycle and long term)
Index
Index
Yield Based
Foreign Currency
Short Dated
 
Flex
 
 
OSI DATA FORMAT
Each OSI will replace the 5-character code with a 21-character OSI identifier to be used in the transmission of listed option contracts between exchanges, the clearinghouses and their constituents. The 21-character OSI identifier comprises six data elements arranged in logical order, each with a minimum field size. An example is provided in the table below.  

 

5-character Code
21-character OSI Identifier*
OSI Data Elements (minimum field size)
Option Root
Symbol
[6]*
Yr
[2]
Mo
[2]
Day
[2]
C/P
[1]
Dollar
Strike
[5]
Decimal
Strike
[3]
SZVXI
SPX    111216P01900000
SPX
11
12
16
P
01900
000
WMFAW
MSFT  100116C00047500
MSFT
10
01
16
C
00047
500
*If the Option Root Symbol is less than 6 characters, spaces are added to equal the six character minimum.
 
 
OSI TIMELINE & CLIENT IMPACT
The industry effort has been organized into two phases:
 
1. The Conversion Phase in which the OPRA code format will be dropped and the 21-character record layout employed to include the expiration day and decimal strike price. This phase was completed on February 12, 2010; and
 
2. The Consolidation Phase during which LEAPS, wrap, FLEX, short-dated and non-standard delivery contracts will have their symbols consolidated to that of the underlying (e.g. MSQ to MSFT).  This phase will take place over the 5 weekends starting March 12, 2010 and ending May 14, 2010. Note that there are certain contracts, referred to by OCC Class Consolidation Exceptions, which will not be consolidated.  These contracts include binary and CDO options, options having a 5 character underlying as well as  options having unique settlement terms (e.g., settle on open).  In addition, adjusted symbols which are the result of a prior corporate action will be consolidated to the new OSI corporate action format at the time the underlying class consolidates.
 
Outlined in the table below are the key milestone and effective dates for this consolidation phase and the products impacted.
 
Milestone Date Action Issues/Series Impacted Effective Date
Friday, March 12, 2010 Initial group of options representing array of product scenarios to be consolidated (approx 12 classes) Options associated with a strategic group of underlyings including adjusted and non-standard symbols Monday, March 15, 2010
Saturday, March 20, 2010 Standard Expiration    
Wednesday, March 31, 2010 Quarterly Expiration    
Friday, April 9, 2010 Consolidation of options whose primary underlying starts with the letters A-C (approx 503 classes) All options associated with 'A-C' underlyings including adjusted and non-standard symbols Monday, April 12, 2010
Saturday, April 17, 2010 Standard Expiration    
Friday, April 23, 2010 Consolidation of options whose primary underlying starts with the letters D-I (approx 486 classes) All options associated with 'D-I' underlyings including adjusted and non-standard symbols Monday, April 26, 2010
Friday, May 7, 2010 Consolidation of options whose primary underlying starts with the letters J-IR(approx 575 classes) All options associated with 'J-R' underlyings including adjusted and non-standard symbols Monday, May 10, 2010
Friday, May 14, 2010 Consolidation of options whose primary underlying starts with the letters S-Z (approx 503 classes) All options associated with 'S-Z' underlyings including adjusted and non-standard symbols Monday, May 17, 2010
 
IMPORTANT NOTE:
During this consolidation phase Good-till-Canceled (GTC) and Good-till-Date (GTD) orders will need to be canceled for all the option classes which are scheduled to consolidate. To accommodate this exchange mandate, IB will cancel all customer GTC and GTD orders on the Sunday of each milestone cycle.  Confirmation of these cancellations (outs) will be provided prior to effective date open (Monday) at which point customers may re-enter these orders utilizing the post consolidation symbol.
 
EXTERNAL LINKS
For additional information, please visit the symbology initiative sections of the OCC and Montreal Exchange websites.  

 

Technical FAQs - TWS

 

Can I run TWS on my system?
To ensure that you have an adequate Internet connection and proper system requirements to run TWS, we recommend that you first run the demo system.
 
How do I install TWS?
Find download instructions and the necessary files on the Installation Instructions page.
 
What are the minimum system requirements to run TWS?
Minimum and recommended systems requirements for both Windows and operating systems may be found by clicking here.
 
Should I use the standalone or browser-based TWS?
If you have a slower computer or Internet connection, we recommend that you use the standalone version of TWS. If you use the browser-based version, you can access TWS from any internet PC. The standalone version can only be accessed from the PC on which you installed the application. Otherwise, both require that you install the latest Java Runtime Environment and both function the same way.
 
How do I install/upgrade the Java plugin?
Go to the Java Upgrade Instructions page and scroll down to either the Windows or Mac operating system section. Follow instructions for upgrading the Java plugin. Note that if you want to upgrade to a newer Java version, you must first remove the existing plugin and then reinstall the upgraded version. Video instructions for installing the Java Runtime Environment for the Windows operating system can be found by clicking here.
 
What is a beta release, and how can I use it?
The beta release is a pre-production version of an upcoming release that allows you to actively trade while you test new features. You must deliberately elect to use the beta when you log in and should be aware that you do so at your own risk. Since the beta is under construction until production release, we welcome your input on its performance. The beta will be promoted to production after it has been tested both in-house and externally over a specified time period.
 
How do I know what changes are in a new release?
The login page includes links to both the beta and production release notes. These notes briefly describe new features and problems that have been fixed.
 
How will I know when a new TWS version has been released?
If you are running the standalone version, the update wizard will automatically check for TWS updates each time you log in to your PC. You can also manually check for updates from the Start menu by selecting Programs and then Startup and clicking Check for TWS Updates. Customers running the browser-based version will always get the most recent production release when they log in.
 
How do I reinstall TWS?
First, uninstall TWS by going to add/remove programs and removing TWS.  You can then reinstall TWS from the TWS Software page.
 
Why isn't my username recognized?
You will receive this message for one of the following reasons:
- You are not entering the proper username (check to be sure the Caps Lock key isn't on)
- Your account has not been set up yet
- You've entered your password incorrectly more than 10 times
 
Where can I find more information on using TWS?
Instant help resources include the TWS Release Notes, TWS User's Guide, and the online tutorials. If you still cannot find an answer to your question, contact Customer Service.
 
Who do I contact for help?
IB has two distinct departments that handle specific types of TWS questions.Customer service deals with everything involving trading, accounts, funding and execution. See the Customer Service page on the IB website for contact details.The Technical Assistance Center (TAC) can help you with issues concerning your connection to IB and problems with the software involved. To help you more quickly, please:
 
- Call while you are experiencing the problem
- Have your computer turned on and ready to troubleshoot
- Have your account information ready
 
You can also email us at tac@interactivebrokers.com.  Please include the following information:
 
- Your username and account number
- A detailed summary of the problem
- A timeframe of when the problem occurred or occurs.
- Detailed system specifications if possible, including:

    * the Windows version you are using

    * the version of Internet Explorer or Netscape (include cipher strength)

    * the brand names of any Network Interface Cards installed in the computer

    * your processor generation and speed

    * the amount of memory installed in your computer

    * the type of Internet connection you are using

    * any other troubleshooting you have done on your own or with our staff

 

 

TWS Order Checks

The TWS contains two checks to limit the possibility of customers entering trades at prices which are substantially inconsistent with that of the current market. 

Under the first check, stock buy orders which are 10% above the prevailing NBBO ask price will be automatically rejected by IB as will stock sell orders which are 10% below the prevailing NBBO bid price.  In the case of options, IB's automatic rejection threshold percentage for both buy and sell orders is 20%.  When an order violating these parameters is transmitted, it will be rejected and a TWS pop-up window will be displayed with the following warning message: "Limit price too far outside NBBO".

The second check relates to orders which are transmitted at prices which do not violate the parameters set by IB as outlined above, but which do violate parameters established by the account holder.  Here the account holder is able to establish Precautionary Settings by selecting the Order and then Configure Order Presets menu options from the TWS. This will open up a window providing for the creation of price thresholds set in terms of percentage or the number of ticks outside of the NBBO (settings may also be defined in terms of share/contract quantity or total dollar value of trade).  When an order violating the account holder's parameters is transmitted, it will be rejected and a TWS pop-up window will be displayed with the following warning message: "The price specified would violate the percentage constraint specified in the default order settings.  Do you really want to submit this order".  Unlike in the case of the check set by IB, the account holder has the option of overriding their own settings and transmitting the order by clicking on the "Yes" button.

 

Glossary terms: 

How to empty the Java cache

Should you experience issues that would need a reinstallation of the platform and you are using the browser-based Trader Workstation (TWS) you have to empty the Java Cache. The cache is a repository for temporary files that have been downloaded from the Internet and contains browser-based applications or such launched trough the browser (the Internet browser is a program like Internet Explorer, Firefox or Safari).This is a simple procedure that ensures you can download again the latest application files from our servers.

Follow the instructions in this movie to empty the Java cache. To be able to run the browser-based TWS again you just need to launch it as usual.

This movie is destined to users with the operating system Mac OS X.

Create a desktop shortcut for the browser-based Trader Workstation on a Mac

You don't have to open your web-browser ( Internet Explorer, Firefox, Safari) to use the browser-based Trader Workstation. You could have a desktop shortcut for it the same way it is for the standalone version. The icon will be in a different color than the one for the standalone so that you could have both shortcuts.

Follow the instructions in this movie to have the ease of login of the standalone version and the convenience of the browser based platform right on your Desktop

This movie is destined to users with the operating system Mac OS X.

Install the Java Runtime Environment on a Windows PC

In order to be able to install the Interactive Brokers Trader Workstation on your computer you need to have the Java Runtime Environment. This video walks you trough the process of installation of Java.

How can I trade stocks during the pre market or post market?

Overview: 

By default, orders for some products are entered with a restriction referred to as Regular Trading Hours (RTH) Only.  This restriction may prevent submitted orders from executing during the pre and post market sessions.  The following article will clarify this time restriction as well as how it can be modified.

 

 

Background: 

There are risks inherent in trading outside of Regular Trading Hours (RTH) including reduced liquidity, increased volatility, and expanded error trade guidelines  that traders should be aware of and willing to assume prior to transmitting active orders into the market during these times.

 

 

Contents:

How to determine if a submitted order has a RTH restriction applied.

Changing Default Settings

Other Important Notes

 

 

How to determine if a submitted order has a RTH restriction applied.

 

Trader Workstation (TWS)

Orders restricted to RTH only will display a clock icon in the Time in Force (TIF) field.

Hold your mouse over the clock icon to display information regarding when the order can be filled.

         

Orders without a time restriction will either display no clock icon or will display the clock icon with an exclamation point over it to indicate that it will be active outside of the regular trading session.

         

 Traders may change the RTH setting by clicking this field before the order has been transmitted.  From the dropdown that appears, check the box that says "Fill outside RTH".

 

Web Trader

The Create Order window in the Web Trader displays a checkbox that says "Fill Outside Regular Trading Hour".  If this box is grayed out, it indicates that the RTH setting is not applicable for the default order type.

 

Note:  The RTH restriction cannot be modified once an order has been transmitted.  In order to change the RTH restriction the submitted order must be canceled and a new order entered with the appropriate RTH selection.

Changing Default Settings

 

Web Trader

The web trader does not support saving of default order types and configurations.  As a result, traders must select the RTH option for each order created if the intention is for it to be active outside of the regular trading session.

 

Trader Workstation (TWS)

Traders can adjust the default RTH setting in the TWS as follows;

1.  From the Edit >> Global Configuration menu at the top of the main TWS screen. 

           

2. On the left side of the window that appears, click the "+" next to the word Presets to expand the section.

         

2.  Next, select the product type (Stocks, Futures, etc.) by clicking on the word so that it is highlighted.

         

3.  In the Primary Order section, be sure the Order Type is set to LMT. (if MKT or STP is set as the default the RTH setting will not be applicable).

         

4.  In the Timing section, check the box that says "Allow order to be activated, triggered, or filled outside of regular trading hours".

         

5.  Click Apply and then OK at the bottom of the window.

6.  Orders that support modification of the RTH restriction (for the product selected in step #1) will be created with the new default applied.

 

Other Important Notes:

 

* Traders unfamiliar with the Regular Trading Hours for a particular product may right click on the market data line and choose Contract Info >> Description.  This window will list the Regular Trading Hours for the selected product.

* Forex, OTCBB, and Pink Sheet securities do not have a Regular Trading Hours designation as there is no centralized marketplace or primary exchange.  Traders should use caution when trading these products during the early and late sessions as orders will execute regardless of any default RTH restriction previously applied.

 

Is there a training manual for the Trader Workstation?

Overview: 

Yes, IB provides a Users' Guide for the Trader Workstation (and also the Web Trader).  This Users' Guide can be found on the website.

Background: 

You can access the TWS User's Guide at the following link: TWS User's Guide.  There is also a printable version available, but be aware that it is very long should you decide to print it out.  Once the online guide is loaded, you can use the column of yellow folders on the left side to navigate the guide.  For quick access to information on a particular issue you can use the Search button found at the top of the page.

How do I enter the symbol for Berkshire Hathaway Class B shares onto TWS?

Overview: 

There are a variety of symbol conventions for denoting Berkshire Hathaway Class B shares (CUSIP 084670207).  On the IB trading platforms, this security is designated by entering BRK, then a space and then B (BRK B).  This compares to Bloomberg which uses the convention BRK/B and Yahoo Finance which uses BRK-B.

 

It should also be noted that this security has been designated as a 10-share unit issue by its primary listing exchange, NYSE Arca, due to its relatively low trading volume. A round lot in this security is therefore set at 10 shares as opposed to the standard round lot unit of 100 shares.  If your opening buy or sell order is for an amount less than 10 shares, it is considered an odd-lot and subject to  special handling considerations.   Please review our website under the Trading and then Order Types menu options for additional details.

How do I add the field OCA Group to my Trader Workstation trading page?

Overview: 

Towards the top right corner of the TWS Order Management Screen, you will see a "Trader Workstation/Ticker Lookup" search field.  Immediately to the left of this you will see a wrench shaped icon.  Click the icon.  From here, click on the Order Columns tab from the TWS Configuration window.  On the right side under Available Columns, click on Order Attributes to expand that selection and see all of your choices.  Click on OCA Group so that it is highlighted.  Then click on the Add button.  This will add OCA Group to the Shown Columns list.  Now click on the Apply button at the bottom of the window, and then the OK button.  The OCA Group column should now be on your TWS Order Management page.

Note: Because the OCA procedure is an automated process, there is no guarantee that requested cancellations and modifications will reach the specific exchange before an order has been executed.

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