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Philadelphia Stock Exchange Semiconductor Index - SOX

Philadelphia's Semiconductor Index is made up of 16 U.S. companies involved in the design, distribution, manufacture, and sale of semiconductors. It is a price-weighted index that includes some of the largest and most widely held semiconductor stocks.

The SOX was originally set to a value of 200 on December 1, 1993 and went through a 2-for-1 split on July 24, 1995. Options were offered beginning September 7, 1994 and the index offers investors the ability to participate in the industry without having to select a specific company or issue of stock.

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 Market Share
Altera Corp. ALTR 8.58
Applied Materials Inc. AMAT 6.43
Advanced Micro Devices AMD 2.06
Intel Corp. INTC 7.12
KLA - Tencor Corp. KLAC 6.27
Linear Technology Group LLTC 6.55
Lattice Semiconductor LSCC 4.9
LSI Logic Corp. LSI 4.46
Motorola Inc. MOT 9.39
Micron Technology Inc. MU 4.58
National Semiconductor NSM 2.37
Novellus Systems Inc. NVLS 6.3
Rambus Inc. RMBS 7.17
Teradyne Inc. TER 5.72
Texas Instruments Inc. TXN 12.59
Xilinx Inc. XLNX 5.5


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