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S&P Healthcare Index HCX

The Standard and Poors' Healthcare Index is an index of domestic companies within the healthcare industry. It is a capitalization-weighted index, representing a sector of the S&P 500. Each component stock is weighted according to the total market value of its outstanding shares.

The strength of a component is proportional to the issue's total market value: share price multiplied by the number of shares outstanding. These are summed for all stocks and divided by a set value. This base value is adjusted to reflect changes in capitalization as a result of mergers and acquisitions, stock rights, substitutions, etc.

HCX options expire on the Saturday immediately following the third Friday of the expiration month. Expiration months are generally two near term months plus two additional months from the March quarterly cycle (March, June, September and December).

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.

Symbol     Name                             Shares        
(In millions)   
Market Value
(In millions)
Weight      
ABT ABBOTT LABORATORIES 1,517.62 77,303.82 5.87%
AET AETNA INC 142.946 11,239.13 0.85%
AGN ALLERGAN INC 65.99 5,889.61 0.45%
AHP AMERICAN HOME PRODUCTS CORP 1,318.01 90,118.93 6.84%
AMGN AMGEN INC 509.024 39,735.69 3.02%
AZA ALZA CORP 99.884 3,664.49 0.28%
BAX BAXTER INTERNATIONAL INC 285.993 18,964.91 1.44%
BCR CR BARD INC 53.603 2,817.51 0.21%
BDX BECTON DICKINSON AND CO 249.002 9,462.08 0.72%
BMET BIOMET INC 112.314 4,871.62 0.37%
BMY BRISTOL MYERS SQUIBB CO 1,987.14 128,791.77 9.78%
BOL BAUSCH AND LOMB INC 56.09 3,915.78 0.30%
BSX BOSTON SCIENTIFIC CORP 392.92 15,667.69 1.19%
COL COLUMBIA HEALTHCARE CORP 645.506 13,434.59 1.02%
GDT GUIDANT CORP. 301.278 19,583.07 1.49%
HCR HCR MANOR CARE, INC. 110.847 2,708.82 0.21%
HRC HEALTHSOUTH CORP 423.057 4,336.33 0.33%
HUM HUMANA INC 167.381 1,924.88 0.15%
JNJ JOHNSON AND JOHNSON 1,344.67 131,777.56 10.00%
LLY ELI LILLY AND CO 1,099.70 99,247.93 7.53%
MDT MEDTRONIC INC 584.185 42,170.86 3.20%
MKG MALLINCKRODT INC 71.285 1,889.05 0.14%
MRK MERCK AND COMPANY INC 2,382.13 198,311.99 15.05%
PFE PFIZER INC 1,297.79 189,559.04 14.39%
PNU PHARMACIA AND UPJOHN INC 508.052 31,753.25 2.41%
SGP SCHERING PLOUGH CORP 1,469.61 87,901.17 6.67%
STJ ST JUDE MEDICAL INC 84.162 2,061.97 0.16%
THC TENET HEALTHCARE CORP 310.142 6,512.98 0.49%
UNH UNITED HEALTHCARE CORP 186.233 8,822.79 0.67%
WLA WARNER LAMBERT CO 821.41 58,730.82 4.46%
WPI WATSON PHARMACEUTICALS 95.129 4,251.08 0.32%

 


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