ISE Biotechnology and Pharmaceuticals Index

International Securities Exchange offers options on a cash-settled ISE Biotech and Pharmaceuticals Index (RND). This ISE proprietary index includes companies primarily engaged in researching, developing, manufacturing, producing, or marketing pharmaceuticals or other products based on biotechnology research. Many of the 20 companies represented in the Index are highly recognizable, including: Abbott Labs, Amgen, GlaxoSmithKline, Pfizer, and Merck & Company.

The index attempts to capture at least two-thirds of the entire sector's 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, and individual component weightings are limited to 25% at semi-annual reviews. Quarterly rebalancing events are used to “re-set” the weighting of each component so each component has an equal influence on the index performance.

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

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

Contract Overview

Full specifications can be found at the ISE web site.

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.