Difference between revisions of "ISE Clean Water Index"

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The cash-settled '''ISE Water Index''' (HHO) includes companies [[http://www.ise.com/WebForm/options_product_indexDetails.aspx?categoryid=234&header0=true&menu2=true&link2=true&symbol=HHO]] engaged in water distribution, water filtration, flow technology, and other water solutions. In addition, in February 2007, ISE announced that it had entered into an agreement with First Trust Advisors L.P., an investment management firm, to create and list exchange-traded funds (ETFs) on the ISE Water Index.
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The [[International Securities Exchange]] offers [[cash-settled]] options on its proprietary ISE Clean Water Index (HHO).<ref>{{cite web|name="Product Details: Contract Specs” |url=http://www.ise.com/WebForm/options_product_indexDetails.aspx?categoryid=234&header0=true&menu2=true&link2=true&symbol=HHO |org=International Securities Exchange |date=Nov. 17, 2007}}</ref> Index components include companies engaged in water distribution, water filtration, flow technology, and other water solutions.<ref>{{cite web|url=https://cleanedge.com/indexes/stock-index/hho|name=ISE Clean Edge Water Index (HHO)|org=Cleanedge.com|date=May 16, 2019}}</ref>
 
== Related water instruments ==
=== ETFs on HHO ===
In February 2007, ISE announced that it had entered into an agreement with [[First Trust Advisors L.P.]], an investment management firm, to create and list exchange-traded funds (ETFs) on the ISE Water Index.
 
=== USFE futures on ISE Homebuilders Index ===
Additionally, the [[U.S. Futures Exchange]] ([[USFE]]) listed a [[futures contract]] on the ISE Water Index (FHHO) in 2007.<ref>{{cite web|name="ISE Indexes” |url=http://www.usfe.com/products-ei-ise.html|org=US Futures Exchange|date=Nov. 17, 2007}}</ref>
 
== Background on water industry ==


Companies with exposure to the global water industry have recently emerged as a compelling investment themes. Increasing privatization of water system assets, an aging infrastructure, costly new regulatory guidelines, population increases in water-stressed regions, and industry consolidation have focused attention on companies with significant exposure to water. As a natural resource with no substitute, water is considered by many to have similar characteristics to oil -- available supply is limited, and demand will increase exponentially from expanding global population and industrial demand.
Companies with exposure to the global water industry have recently emerged as a compelling investment themes. Increasing privatization of water system assets, an aging infrastructure, costly new regulatory guidelines, population increases in water-stressed regions, and industry consolidation have focused attention on companies with significant exposure to water. As a natural resource with no substitute, water is considered by many to have similar characteristics to oil -- available supply is limited, and demand will increase exponentially from expanding global population and industrial demand.


 
== Components and weighting ==
With 36 underlying stocks in the index, it uses a modified market capitalization-weighted methodology to create a more uniform weight distribution. This prevents a few large component stocks from dominating the index but still promotes portfolio diversification by retaining the
With more than 30 underlying stocks in the index<ref>{{cite web|name="ISE Water Index Components”|url=http://www.ise.com/WebForm/options_product_indexDetails.aspx?categoryid=234&header0=true&menu2=true&link2=true&symbol=HHO
|org=International Securities Exchange |date=Nov. 17, 2007}}</ref>
, it uses a modified market capitalization-weighted methodology to create a more uniform weight distribution. This prevents a few large component stocks from dominating the index but still promotes portfolio diversification by retaining the
economic attributes of capitalization ranking. Semi-annual reviews and rebalancing events are used to “re-set” the weighting of each component such that each component has a proportionate influence on the index performance.
economic attributes of capitalization ranking. Semi-annual reviews and rebalancing events are used to “re-set” the weighting of each component such that each component has a proportionate influence on the index performance.


== ISE Water Index Option Contract Overview ==
Full specifications can be found on the [[ISE]] web site.


'''Brief look at specifications:'''  
{|cellspacing=1 cellpadding=2 border=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.
|}


Trading hours: 9:30 A.M. - 4:00 P.M. Eastern Time (New York time).  
As of Nov. 1, 2007, there are 31 [[ISE index options]] listed.




Expiration months: Four near-term months followed by one additional month from the March quarterly cycle (March, June, September and December).
== USFE ISE Water Index Futures Contract Overview ==


Underlying: ISE Water™ Index
{|cellspacing=1 cellpadding=2 border=1


Strike price intervals: At least $2.50.  
|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
|}




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.
== References ==


<references />


'''Full specifications''': [[http://www.ise.com/WebForm/options_product_indexDetails.aspx?categoryid=234&header0=true&menu2=true&link2=true&symbol=HHO]]
[[Category:International Securities Exchange - Indexes]]
[[Category:International Securities Exchange]]
[[Category:USFE Products]]
[[Category:Indexes]]

Latest revision as of 20:22, 16 May 2019


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The International Securities Exchange offers cash-settled options on its proprietary ISE Clean Water Index (HHO).[1] Index components include companies engaged in water distribution, water filtration, flow technology, and other water solutions.[2]

Related water instruments[edit]

ETFs on HHO[edit]

In February 2007, ISE announced that it had entered into an agreement with First Trust Advisors L.P., an investment management firm, to create and list exchange-traded funds (ETFs) on the ISE Water Index.

USFE futures on ISE Homebuilders Index[edit]

Additionally, the U.S. Futures Exchange (USFE) listed a futures contract on the ISE Water Index (FHHO) in 2007.[3]

Background on water industry[edit]

Companies with exposure to the global water industry have recently emerged as a compelling investment themes. Increasing privatization of water system assets, an aging infrastructure, costly new regulatory guidelines, population increases in water-stressed regions, and industry consolidation have focused attention on companies with significant exposure to water. As a natural resource with no substitute, water is considered by many to have similar characteristics to oil -- available supply is limited, and demand will increase exponentially from expanding global population and industrial demand.

Components and weighting[edit]

With more than 30 underlying stocks in the index[4] , it uses a modified market capitalization-weighted methodology to create a more uniform weight distribution. This prevents a few large component stocks from dominating the index but still promotes portfolio diversification by retaining the economic attributes of capitalization ranking. Semi-annual reviews and rebalancing events are used to “re-set” the weighting of each component such that each component has a proportionate influence on the index performance.

ISE Water Index Option Contract Overview[edit]

Full specifications can be found on 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.

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


USFE ISE Water Index Futures Contract Overview[edit]

Underlying: ISE Water™ 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[edit]

  1. "Product Details: Contract Specs”. International Securities Exchange.
  2. ISE Clean Edge Water Index (HHO). Cleanedge.com.
  3. "ISE Indexes”. US Futures Exchange.
  4. "ISE Water Index Components”. International Securities Exchange.