| Description of Index |
The Amex Defense Index (DFI) is an equal dollar weighted index designed to represent a cross section of widely held, highly capitalized companies involved in providing systems, equipment and services to the United States government and its allies for the purpose of supporting military, defense and intelligence efforts. The component stocks operate in industry segments that include, but are not limited to, military aircraft manufacturing, shipbuilding, ground transportation, aerospace instrumentation and technology, specialized communication and radar systems, ammunition and weapon systems. The Index was established with a benchmark value of 500.00 on September 21, 2001. The DFI Index is rebalanced quarterly based on closing prices on the third Friday in March, June, September and December to ensure that each component stock continues to represent approximately equal weight in the Index. |
| Components |
For Index components click here. |
| Trading Unit |
The minimum trade size is one option contract. The notional value underlying each contract equals $100 multiplied by the Index value. |
| Expiration Cycle |
Three consecutive near-term expiration months plus two successive months from the March cycle. |
| Expiration |
The Saturday following the third Friday of the expiration month. |
| Last Trading Day |
Two business days prior to expiration (normally a Thursday). |
| Exercising 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. |
| 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. |
| Exercise Price Intervals |
Exercise (strike) prices are set at $5.00 intervals, bracketing the current value of the Index, when the Index is above 200. If the Index is below 200, the interval will be $2.50. |
| Option Premium Quotations |
Stated in dollars and cents. Minimum price variant $0.05 (nickel) for series trading under $3.00 and $0.10 (dime) for series trading $3.00 and above. |
| Index Settlement Value |
Determined on the last business day prior to expiration, based on the first (opening) reported sale price for each component stock. |
| Settlement of Exercise |
Next business day following expiration. |
| Position Limits |
31,500 contracts on the same side of the market. |
Minimum Customer Margin
for Uncovered Writers |
100% of the market value of the option plus 20% of the aggregate Index value less any out-of-the-money amount, subject to a minimum of 100% of the market value of the option plus 10% of the aggregate Index value. |
| Trading Hours |
9:30 a.m. to 4:00 p.m., New York time. |
| Trading System |
Specialist/Registered Options Trader. |
| Trading Symbol |
DFI |
| Final Settlement Value Symbol |
DOI |
