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AM Networking Index NWX

The Networking Index measures performance of 15 large, actively traded computer and telecommunication networking stocks.

This index is calculated by using a modified equal-dollar-weighting method. It designates the number of shares representing an investment of 12% in each of the four highest capitalized securities (48% of the index value) and 4.73$ in each of the remaining 11 (total of 52%) in order to approximate market capitalization. The aggregate value was divided by a divisor to create the benchmark of 200.00 at the close of trading on October 20, 1995.

If adjustments are required, they are made after the close of trading on the third Friday of January, April, July and October. This is done in order to maintain the 48/52 ratio between the most capitalized and the remaining securities.

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 Company
ADPT Adaptec Inc. Telecommunications, Inc.
FORE FORE Systems, Inc.
ADCT ADC Telecom Inc.
LU Lucent Technologies, Inc.
ALA Alcatel Alsthom
NN Newbridge Networks Corp.
ASND Ascend Communications, Inc.
NT Northern Telecom Limited
CS Cabletron Systems, Inc.
PAR PairGain Technologies, Inc.
CIEN Ciena Corp.
TLAB Tellabs, Inc.
CSCO Cisco Systems, Inc.
COMS 3Com Corp.
ECILF ECI Telecommunications Limited

 


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