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AMEX Airline Index

The XAL monitors the performance of highly capitalized companies in the airline industry. It tracks the overall performance of major U.S. and overseas airline companies.

The XAL is equal-dollar weighted so that each component security is represented in nearly equal dollar value to one another. The weighting was established by designating the number of shares that each component security would require to total $10,000 in value as of closing on October 21, 1994. For example, 1,000 shares in the index would represent a stock that closed at $10 pre share on the 21st. The aggregate value of the stocks was reduced by a divisor to generate the benchmark value of 200. Adjustments are made quarterly, on the third Friday of January, April, July, and October in order to ensure that each component stock continues to represent equal value in the index.

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
ALK Alaska Air Group, Inc.
KLM KLM Royal Dutch Airlines NV
AMR AMR Corporation
NWAC Northwest Airlines Corp.
COMR Comair Holdings, Inc.
LUV Southwest Airlines Co.
CAI.B Continental Airlines, Inc.- CL. B
UAL UAL Corporation
DAL Delta Air Lines, Inc.
U US Airways Group, Inc.


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