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)
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.
Lilly (Eli) & Company
|Merck & Company, Inc.
|American Home Products Corporation
|Pharmacia & Upjohn, Inc.
|Bristol-Myers Squibb Company
|SmithKline Beecham plc
|Glaxo Wellcome plc
|Johnson & Johnson