Option symbology is confusing me. Why, for example, does Disney have two symbols (DIS & HFW) for its options?

Question

Here is a specific example that speaks to my question above. While looking at the Jan 08 options for Disney, we see a multitued of options and their strike prices (just what we would expect). However, every strike price has two symbols:

Example:

DISMF.X 30.00 call 0.45 LAST
HFWMF.X 30.00 call 0.70 LAST

If I want to purchase a Jan 08 30.00 call for Disney, which one should I buy? What is the difference between the two?

Thanks!

Answer 1

The first answer is incorrect. When a regular (non-LEAPS) options are created with the same expiration, the LEAPS options are converted to the regular options symbols. The LEAPS no longer exist.

The only time there are two options of the same type (call or put) with the same expiration date and same strike price is when one of the options is an adjusted option. In this case, the adjusted option is detailed at

http://search.cboe.com/cgi-bin/MsmGo.exe?grab_id=0&page_id=32058&query=dis&hiword=dis%20

"all DIS/VDS/WDS options
outstanding as of Wednesday, June 13, 2007, were adjusted to require the percontract
delivery or receipt of the following: (A) 100 shares of The Walt
Disney Company ("DIS"); plus (B) 7 shares of Citadel Broadcasting Corporation
("CDL"); plus (C) $4.06 cash in lieu of 0.67961315158343 fractional share of
CDL (based on a whole-share price of $5.979 for fractional CDL shares). The
DIS/VDS/WDS option symbols changed to HFW, HCG or UCW, as the case may be.
Premiums and strike-price amounts for the adjusted HFW/HCG/UCW options
continue to be calculated on the basis of a multiplier of 100, i.e., for
premium and strike-price extensions, 1.00 equals $100. Strike prices remain
the same."

In the future, if you run into this situation again, you can go to

http://search.cboe.com/scs/searchsite.aspx?query=dis&Category=StockSM

to find the adjustment notice.

Answer 2

You can purchase either! the dismf is the regular call and the hfwmf is the LEAP that expires at the same time. You'll probably feel more comfortable watching the DISMF because it's what you're used to seeing and will probably be seen the most in print! Hope this helps.