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Product Description
The Airline Index is designed to
measure the performance of highly capitalized companies in the airline industry. The Index
tracks the aggregate performance of major U.S. and overseas airlines. |
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Equal-Dollar Weighting
The Index is equal-dollar
weighted, designed to ensure that each of its component securities is represented in
approximate equal dollar value. Equal-dollar weighting was established by designating the
number of shares of each component security that represented approximately $10,000 in
market value, based on closing prices on Oct. 21, 1994 (e.g., a stock that closed at $20
per share would be represented in the Index by 500 shares for a total market value of
$10,000). The aggregate value of the stocks was reduced by a divisor to establish an Index
benchmark value of 200.00. To ensure that each component stock continues to represent
approximate equal market value in the Index, adjustments are made quarterly after the
close of trading on the third Friday of January, April, July and October. |
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Index Components
Components list as of 10/8/01
| The Airline
Index is composed of shares of the following issues: |
| Alaska Air Group, Inc. |
(ALK) |
KLM Royal Dutch Airlines NV |
(KLM) |
| America West Holdings Corporation CL.B |
(AWA) |
Northwest Airlines Corp. |
(NWAC) |
| AMR Corporation |
(AMR) |
Southwest Airlines Co. |
(LUV) |
| Continental Airlines,
Inc.- CL. B |
(CAL) |
UAL Corporation |
(UAL) |
| Delta Air Lines, Inc. |
(DAL) |
US Airways Group, Inc. |
(U) |
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Trading Unit
The minimum trade size is one
option contract. The notional value underlying each contract equals $100 multiplied by the
Index value. |
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Expiration Cycle
Three consecutive near-term
expiration months plus two successive months from the January cycle. |
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Expiration
The Saturday following the third
Friday of the expiration month. |
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Last Trading Day
Two business days prior to
expiration (normally a Thursday). |
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Limited Exercise of Options
European style. Options may be
exercised only on the last business day prior to expiration (normally a Friday). Writers
are subject to assignment only at expiration. Check with your broker to ascertain cut-off
times for exercise and provisions for automatic exercise. |
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"Delivery" Method
if Exercised
Cash settlement based on the
dollar difference between the final settlement value of the Index and strike price of the
contract multiplied by $100. |
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Exercise Price Intervals
Exercise (strike) prices are set
at five-point intervals, bracketing the current value of the Index when the Index is above
200. If the Index is below 200, the interval will be 2 ½ points. |
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Option Premium Quotations
Stated in dollars and fractions.
One point equals $100. Minimum tick for series trading below 3 is 1/16 ($6.25); for all
other series, 1/8 ($12.50). |
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Final Index Settlement Value
Determined on the last business
day prior to expiration, based on the first (opening) reported sale price for each
component stock. |
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Settlement
Next business day following
expiration. |
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Position Limits
15,000 contracts on the same side
of the market. |
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Minimum Customer Margin for
Uncovered Writers
Premium plus 20% of the aggregate
Index value (Index value x $100) reduced by any out-of-the-money amount to a minimum of
premium plus 10% of the aggregate Index value. |
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Trading Hours
9:30 a.m. to 4:02 p.m., New York
time. |
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Trading System
Specialist/Registered Options
Trader. |
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CUSIP Number
030974109 |
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Trading Symbol
XAL |
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Final Settlement Value
Symbol
XAO |
