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PHLX Semiconductor Sector^SM (SOX^SM)

The PHLX Semiconductor Sector^SM (SOX^SM) is a price-weighted index composed of 18 companies primarily involved in the design, distribution, manufacture, and sale of semiconductors. The index was set to an initial value of 200 on December 1, 1993 and was split two-for-one on July 24, 1995; options commenced trading on September 7, 1994.

Contract Specifications*

Trading Symbol: SOX

Alternate Symbols: SOO, SOY, SXX, SJX, SOW
If you are unable to obtain a listing for a strike price under the trading symbols, use the alternate symbols.

Settlement Value Symbol: SX

CUSIP® Numbers: 692982

Exercise Style: American - may be exercised on any business day before the expiration date.

Expiration Date: Saturday following the third Friday of the expiration month.

Expiration Cycle: Three months from the March, June, September, December cycle plus two additional near-term months (five months at all times).

Settlement: Cash

Settlement Value For Expiring Contracts: Based on the opening prices of the component stocks on the last trading day prior to expiration (usually a Friday). The settlement value is disseminated under the symbol SX.

Last Trading Day for Expiring Contracts: The last business day (usually a Thursday) before the third Friday of the expiration month.

Index Multiplier: $100 (i.e., one contract = index value x 100)

Index Value Calculation:

Total of all Component Prices

Base Market Divisor

Exercise (Strike) Price Intervals: The Exchange shall determine fixed-point intervals of exercise prices for index options. Generally, the exercise (strike) price intervals will be no less than $5. However, the Exchange may determine to list strike prices at no less than $2.50 intervals if the strike price is less than $200 for listed indexes, and in response to demonstrated customer interest or specialist request.

Premium Quotation: One point = $100. Thus a premium quote of 2 is $200. The minimum change in a premium under 3 is $5.00 and the minimum change in a premium of 3 or greater is $10.00.

Position Limits: 31,500 contracts on the same side of the market. Hedge exemptions are available.

Margin: Uncovered writers must deposit 100% of the option proceeds plus 20% of the aggregate contract value (current index level multiplied by $100) minus the amount by which the option is out-of-the-money, if any. Minimum margin is 100% of the option proceeds plus 10% of the aggregate contract value. Long puts or calls must be paid for in full.

Trading Hours: 9:30 a.m. to 4:00 p.m. EST/EDT (Philadelphia Time)

Issuer and Guarantor: The Options Clearing Corporation (OCC)

Trading Example:

An investor wishes to capitalize on a market decline in the semiconductor industry over the next 9 months. In April, SOX is trading at a level of 370. The investor decides to purchase 10 in-the-money SOX December 375 puts at 15 ( 10 x $15 x 100 = $15,000). At expiration, SOX has declined approximately 5% to 351, yeilding the investor a profit of $9,000 - a 60% return on his initial investment.

SOX value at expiration	375
Less SOX call option strike	-351
	------------
	24
Intrinsic value of option 24 pts.Multiply by # of contracts	x10
	------------
Intrinsic value of position ( measured in pts.)	240
Multiply by index multiplier ($100)	x100
	------------
Proceeds	$24,000
Less cost of SOX puts	-15,000
	------------
Net Profit	$ 9,000

PHLX Semiconductor Sector, SOX^SM are service marks of the Philadelphia Stock Exchange.

*Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options (“ODD”). Copies of the ODD are available from your broker, by calling 1-888-OPTIONS, or from The Options Clearing Corporation, One North Wacker Drive, Suite 500, Chicago, IL 60606. The information on this Website is provided solely for general education and information purposes and therefore should not be considered complete, precise, or current. Many of the matters discussed are subject to detailed rules, regulations, and statutory provisions which should be referred to for additional detail and are subject to changes that may not be reflected in the Website information. The Philadelphia Stock Exchange assumes no responsibility for any errors or omissions in the Website. No statement within the Website should be construed as a recommendation to buy or sell a security or to provide investment advice.

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PHLX Semiconductor SectorSM (SOXSM)

Contract Specifications*

Trading Example:

PHLX Semiconductor Sector^SM (SOX^SM)