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AM Pharmaceutical Index DRG

The Pharmaceutical Index is representative of the widely held, highly capitalized firms engaged in the pharmaceutical industry. The DRG, made up of 15 companies, is market value (capitalization) weighted

An industry sector index affords investors the opportunity to participate in market trends without having to research and select specific stocks or groups of stock. A market sector index is a simpler, more efficient measure of movement within a given industry. A contract within a market sector index affords investors to focus efforts on overall market movement rather than the risks behind a specific stock.

Sector indices will reflect movement within their given markets to the extent their member companies represent the given industry. A sector index is "benchmarked" against the value at which it was originally set and will typically be altered at least once per year to maintain an accurate representation.

Options are traded on a given index and are settled in cash, unlike equity options which are settled in stock. The assigned writer (seller) is obligated to pay the exercising holder (buyer) the difference between the closing value of the underlying index and the exercise (strike) price of the option, multiplied by the specified index multiplier (usually $100). Basically, a multiplier of 100 in a sector index means that for every point a sector option is "in the money," there is an incremental $100 of intrinsic value.

Name Symbol
Abbott Laboratories ABT
Lilly (Eli) & Company LLY
ALZA Corporation AZA
Merck & Company, Inc. MRK
American Home Products Corporation AHP
Pfizer, Inc. PFE
Amgen, Inc. AMPG
Pharmacia & Upjohn, Inc. PNU
AstraZeneca PLC AZN
Schering-Plough Corporiation SPG
Bristol-Myers Squibb Company BMY
SmithKline Beecham plc SBH
Glaxo Wellcome plc GLX
Warner-Lambert Company WLA
Johnson & Johnson JNJ


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