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
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
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
||Adaptec Inc. Telecommunications, Inc.
||FORE Systems, Inc.
||ADC Telecom Inc.
||Lucent Technologies, Inc.
||Newbridge Networks Corp.
||Ascend Communications, Inc.
||Northern Telecom Limited
||Cabletron Systems, Inc.
||PairGain Technologies, Inc.
||Cisco Systems, Inc.
||ECI Telecommunications Limited