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
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.
Applied Materials Inc.
|Advanced Micro Devices
|KLA - Tencor Corp.
|Linear Technology Group
|LSI Logic Corp.
|Micron Technology Inc.
|Novellus Systems Inc.
|Texas Instruments Inc.