ISE Gold Index

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The International Securities Exchange offers options on a cash-settled ISE Gold Index (HVY). This ISE proprietary index tracks the combined performance of 20 publicly traded companies that own or operate gold mines, or are involved in the production of gold and related products.[1]

Related ISE Gold index instruments

Additionally, the U.S. Futures Exchange (USFE) listed a futures contract on the ISE Gold Index (FHVY) in 2007.[2]

Market Capitalization and Weighting

The Index attempts to capture at least two-thirds of the entire industry’s market capitalization. Due to the non-uniform weight distribution across entire industries, an equal-weighted methodology or a “modified” market capitalization-weighted methodology is used to adjust the weighting of component stocks. Individual component weightings are limited to 25% at semi-annual reviews for modified capitalization-weighted indexes. This modification prevents a few large component stocks from dominating the index and distorting an index return that is representative of an industry sector. The modified approach promotes portfolio diversification by retaining the economic attributes of capitalization ranking.

ISE Gold Index Option Contract Overview

Full specifications can be found at the ISE web site.[1]

Trading hours 9:30 A.M. - 4:00 P.M. Eastern Time (New York time).
Expiration months Four near-term months followed by one additional month from the March quarterly cycle (March, June, September and December).
Strike price intervals At least $2.50.
Minimum trading increments The minimum trading increment for an options contract trading at less than $3.00 is $0.05. The minimum trading increment for an options contract trading at $3.00 or higher is $0.10.

The ISE Gold Index is one of eight ISE industry indexes that also include: ISE Oil & Gas Services; ISE Integrated Oil; ISE U.S. Regional Banks; ISE Semiconductors; ISE Biotech & Pharmaceuticals; ISE Homebuilders and ISE SINdex.

As of Nov. 1, 2007, there are 31 ISE index options listed.

USFE ISE Gold Index Futures Contract Overview

Underlying: ISE Gold™ Index

Quotation Index Points
Contract Size $100 per Index Point
Minimum Tick Size 0.05
Minimum Calender Spread Tick Size 0.01
Outright Tick Value $5
Minimum Size for Block Trade 50 contracts
Mistrade Parameters 30 ticks
Reportable Positions 200 contracts
Position Limits / Accountability Limits at 25,000 contracts
Screen Price 9999.95
Settlement Cash Settled


References

  1. 1.0 1.1 Product Details. International Securities Exchange.
  2. "ISE Indexes”. www/usfe.com.