Code for Unused Wire in Cable

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SAS

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I am connecting a timer to my hot water heater. The current circuit is on a 10/2 cable. When I install the timer I will need to add a short piece of cable. I have 10/3 on hand, so I plan to use it for the run from the timer to the heater. Is there anything in the electrical code that specifies how to handle the extra wire? I've seen them cut off, capped with a wire nut and bent back through the Romex connector. Are any one of these three methods mandated by code or generally preferred?
 

Jadnashua

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Put a wire nut on each end of the unused conductor so that it can't accidentally make contact with anything.
 
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