ISE index options

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The International Securities Exchange offers 31 index options (as of Nov. 1, 2007), 19 of which are ISE proprietary indexes. Eight of those 19 are very targeted ISE industry indexes.

The remainder of ISE's indexes - 12 of them - are based on broader and more targeted indexes licensed to ISE (and to other exchanges) by Nasdaq, Russell, Standard & Poor's, Morgan Stanley, and others.

The great majority of index options on ISE are full-sized, with four mini-sized versions (1/10 the size of the larger indexes).

In addition, ISE recently introduced their first ETFs on three of these indexes: the First Trust-ISE Water Index Fund (underlying index ticker: HHO); the First Trust-ISE-Revere Natural Gas Index Fund (underlying index ticker: FUM); and the First Trust-ISE ChIndia Index Fund (underlying index ticker: ICK).

History and Focus

ISE introduced its first index options in October 2003, the first time indexes were traded fully electronically in the U.S. The development and listing of proprietary indexes and the continual licensing of other key indexes has been a major initiative of ISE.

Index Options Offered at ISE

The full listing of option indexes available on ISE follows (as of Nov. 1, 2007), including symbols:

Index	Symbol
ISE Semiconductors *	(BYT)
ISE Electronic Trading *	(DMA)
ISE-Revere Natural Gas *	(FUM)
ISE Water *	(HHO)
ISE-CCM Homeland Security *	(HSX)
ISE Gold *	(HVY)
ISE Chindia *	(ICK)
ISE 50 *	(IXK)
ISE 100 *	(IXX)
ISE 250 *	(IXZ)
ISE U.S. Regional Banks *	(JVX)
ISE Oil and Gas Services *	(OOG)
ISE Integrated Oil and Gas *	(PMP)
ISE-CCM Alternative Energy *	(POW)
ISE Bio-Pharmaceuticals *	(RND)
ISE Homebuilders *	(RUF)
ISE SINdex *	(SIN)
ISE-CCM Nanotechnology *	(TNY)
ISE Revere Wal-Mart Supplier *	(WMX)
Mini FTSE 250 options *	(FTZ)
Mini FTSE 100 options *	UKX
KBW Bank Index	BKX
KBW Mortgage Finance Index	MFX
Morgan Stanley Technology Index	MSH
Mini-Nasdaq-100 Index option‎s	MNX
Nasdaq-100 Index options	NDX
Mini-Russell 2000 options	RMN
Russell 1000 options	RUI
Russell 2000 options	RUT
S&P Mid Cap 400 options	MID
Standard & Poor's Smallcap 600 options	SML

All index options with an (*) are proprietary to International Securities Exchange.

Overall Specifications for All Index Options

Unit of Trade	One contract equals $100 (the index multiplier) times the index level.
Premium Quotations	Stated in points and decimals. One point equals $100. Minimum tick for series trading below 3 is .05 ($5.00), and for all other series, .10 ($10.00).
Strike Price Intervals	Generally, index options are listed at 5-point intervals to bracket the current value of the index. Higher index values may result in larger strike price intervals. Contact each exchange for specific information. MID options are also listed in selective 2.50 point intervals in the nearest two months. (Generally, Index LEAPS® are listed in 2.50-point intervals. SPX options may be listed with up to 25-point intervals in the far-term months. OEX options are listed in 10-point intervals in the far-term month. SPL options are only listed in 25-point intervals. JPN options with more than one year to expiration are listed in 50-point intervals. Strike price intervals of 2.50 points may be available for WSX options.)
Exercise Style	Index options are designated as either American-style or European-style. American-style options can be exercised on any business day prior to expiration. European-style options can be exercised only on the last trading day prior to expiration.
Expiration Dates	The Saturday immediately following the third Friday of the expiration month.
Exercise Settlement Price	The dollar difference between the index number and the strike price of the contract, multiplied by 100. EUR and JPN options have several unique exercise settlement characteristics.
Exercise Settlement Time	Exercise notices tendered will result in the delivery of cash on the next business day.
Trading Hours	9:30 a.m. to 4:15 p.m. (ET) for broad-based indices; 9:30 a.m. to 4:00 p.m. (ET) for industry specific indices; 8:30 a.m. to 11:30 a.m. (ET) for EUR
Minimum Customer Margin for Uncovered Writers	For broad-based indices: the dollar amount of the premium plus 15% of the current underlying index value (index number x $100) minus the amount by which the option is out-of-the-money (if any) with a minimum of the premium plus 10% of the current index value. For industry-specific and narrow-based indices: the dollar amount of the premium plus 20% of the current underlying index value (index number x $100) minus the amount by which the option is out-of-the-money (if any) with a minimum of the premium plus 10% of the current index value.