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Received this from the CBOE thought it might be of interest.
"The darkest hour in any man's life is when he sits down to plan
how to get money without earning it"
Sentinel Trading
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____________________Forward Header_____________________
Subject: Re-Balance of Nasdaq-100? Index
Author: owner-cboe_general_announcements@xxxxxxxx
Date: 12/3/98 5:49 PM
CBOE Regulatory Circular #RG98-134
December 3, 1998
Re-Balance of Nasdaq-100(r) Index
CBOE has been informed by Nasdaq that following the close of business on
December 18, 1998, Nasdaq will change the Nasdaq-100 Index (NDX) to a
modified capitalization weighted index (the "New Index"). The Nasdaq will
continue to calculate the index using the standard capitalization-weighting
methodology (the "Old Index") until March 20, 1999 to facilitate options
trading. The "Old Index" will be disseminated by the Nasdaq under the
symbol IXO. The "New Index" will be disseminated under the symbol NDX.
Adjustment to Current Option Series
All Nasdaq-100 options series outstanding on December 18 will continue to
settle based on the "Old Index" (IXO). Currently there are nine underlying
symbols associated with the NDX -series currently using the underlying
symbol NDX will have a symbol change to IXO, all remaining symbols will
stay the same. The settlement value symbol for these contracts will be NDA.
Following are the underlying symbols associated with the NDX as of December
3, 1998:
Current Expiration New
Symbol Strikes Months Symbol
NDX 900 - 990 Mar 1999 IXO
NDV 1010 - 1090 Jan, Mar 1999 NDV
NCZ 1100 - 1190 Jan, Mar 1999 NCZ
NDY 1200 - 1290 Jan, Mar 1999 NDY
NDZ 1300 - 1390 Jan, Mar 1999 NDZ
NDU 1400 - 1490 Jan, Mar 1999 NDU
NDO 1500 - 1590 Jan, Mar 1999 NDO
NDK 1600 - 1690 Jan, Mar 1999 NDK
NDL 1700 - 1790 Jan, Mar 1999 NDL
New Option Series
Options based on the "New Index" ("NDX") will be listed on December 21,
1998. At-the-money options will be listed under the symbol NDX. Additional
symbols may have to be used for other strike prices. The settlement value
symbol for options based on the "New Index" will be NDS. The new series to
be listed will be determined by the Exchange and disseminated by Wednesday,
December 16.
Position Limits
Any combination of options based on the "Old Index" and options based on
the "New Index" cannot exceed 15,000 contracts in the near-term and 25,000
contracts overall.
Calculation of the New Index
The new modified capitalization-weighting methodology is intended to make
the index more diversified. To implement the change, Nasdaq will review the
composition of the Nasdaq-100 Index on a quarterly basis, beginning in
December 1998, and will adjust the weightings of Index components using a
proprietary algorithm whenever (1) Any individual component security
represents more than 24% of the total market value of the Index, and/or (2)
The combined weight of all securities having individual weightings of at
least 4.50% exceeds 48% of the total market value of the Index. (Once the
index has been adjusted, it will be re-adjusted only if the adjusted index
exceeds the 24% or 48% thresholds.) More information on the new calculation
of the index can be obtained at the nasdaqtrader.com web site.
On Friday, December 11, Nasdaq will post the shares to be used in the "New
Index" on the nasdaqtrader.com web site.
Other Index Changes
ADDITONALLY on December 18, Nasdaq will perform its regularly scheduled
quarterly share changes as well as the annual component changes. Please see
nasdaqtrader.com on December 11, for the new shares and new components for
both the OLD and NEW indices.
Questions regarding this memo can be addressed to the CBOE Investor
Services Department at 1-800-OPTIONS (1-800-678 4667).
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