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Product Description
The Major Market Index
is designed to measure the performance of the blue-chip sector of the market, based on 20
well-known, highly capitalized stocks representing a broad range of industries. It is
calculated continually by summing the component prices and reducing this total by the
current Index divisor. The Index divisor is adjusted periodically (due to stock
replacements and corporate actions such as stock splits, spinoffs, mergers, etc.) to
ensure Index continuity.
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Index Components
Components list as of 07/23/01
| The Major
Market Index is composed of shares of the following issues: |
| American Express Co. |
(AXP) |
General Motors Corp. |
(GM) |
| AT&T Corporation |
(T) |
International Business Machines
Corp. |
(IBM) |
| Chevron Corp. |
(CHV) |
International Paper Co. |
(IP) |
| The Coca-Cola Company |
(KO) |
Johnson & Johnson |
(JNJ) |
| The Disney (Walt) Co. |
(DIS) |
McDonald’s Corporation |
(MCD) |
| Dow Chemical Co. |
(DOW) |
Merck & Company, Inc. |
(MRK) |
| Du Pont (E.I.) de
Nemours & Co. |
(DD) |
3M |
(MMM) |
| Eastman Kodak Co. |
(EK) |
Philip Morris Companies, Inc. |
(MO) |
| Exxon Corp. |
(XON) |
The Procter & Gamble Company |
(PG) |
| General Electric Co. |
(GE) |
Sears, Roebuck and Co. |
(S) |
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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 in the March cycle. |
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Expiration
The Saturday following the third
Friday of the expiration month. |
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Limited Exercise of Options
European-style. Options may be
exercised only on the last trading day prior to expiration (normally a Friday). Writers
are subject to assignment only at that time. Check with your broker to ascertain the cut-off
times for exercise and provisions for automatic exercise. |
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Last Trading Day
One business day prior to
expiration (normally a Friday). |
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"Delivery" Method
if Exercised
Cash settlement based on the
dollar difference between the final settlement value of the Index and the 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 points 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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Settlement
Next New York business day
following expiration. |
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Position Limits
No position limits. |
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Minimum Customer Margin for
Uncovered Writers
Premium plus 15% of the aggregate
Index value (Index number x $100) reduced by the amount by which the option is
out-of-the-money to a minimum of premium plus 10% of the aggregate
Index value. |
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Trading Hours
9:30 a.m. to 4:15 p.m., New York
time. |
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Trading System
Specialist/Registered Options
Trader. |
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CUSIP Number
031126105 |
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Trading Symbol
XMI |
