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----- Original Message -----
From: <A
title=CBOE_eNews_Newsletter@xxxxxxxxxxxxxx
href="mailto:CBOE_eNews_Newsletter@xxxxxxxxxxxxxx";>CBOE
To: <A title=profitok@xxxxxxxxxxxxx
href="mailto:profitok@xxxxxxxxxxxxx";>profitok@xxxxxxxxxxxxx
Sent: Monday, February 25, 2002 3:56 PM
Subject: Your new issue of CBOE eNews is here!
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Volume 3, Issue 8,
February 25, 2002
<FONT
face=Arial color=red size=+1>Option Wrap-Up
2/18/02
2/19/02
2/20/02
2/21/02
2/22/02
4 day avg.
Put/Call ratio
0.84
0.86
0.82
0.94
0.865
VXN closing val.
47.23
46.70
48.08
48.57
47.645
VIX closing val.
26.37
24.26
25.82
24.89
25.335
Equity Option
Vol.
CBOE
945,611
936,568
930,138
855,246
916,891
Index Option
Vol.
CLOSED
167,948
203,314
263,563
187,854
205,670
OEX/XEO Closing
val.
549.22
557.59
548.58
554.04
552.358
OEF Closing val.
55.19
56.09
55.15
55.66
55.523
SPX Closing val.
1,083.34
1,097.98
1,080.95
1,089.84
1,088.028
QQQ Closing val.
34.68
35.15
33.48
33.65
34.240
MNX Closing val.
138.73
140.83
134.83
135.62
137.503
NDX Closing val.
1,387.27
1,408.26
1,348.25
1,356.16
1,374.985
DJX Closing val.
97.45
99.41
98.35
99.68
98.723
RUT Closing val.
459.98
467.25
458.44
465.07
<FONT face=arial
size=-1>462.685<FONT face=Arial
size=-1>
For more information on what happened in the markets, visit <A
href="http://alert.cboe.com/UM/T.asp?A2.15.1004.2.42484";>Market
Data.
Options Institute
Corner <FONT
color=#0000ff>Question:What happens to options on stocks
of a company that is bought by another company?
Answer:Events such as mergers may
result in adjustments. If all of the outstanding shares of an
underlying security are acquired in a merger or consolidation,
outstanding options will, as a general rule, be adjusted to require
delivery of the cash securities, or other property payable to
holders of the underlying security as a result of the acquisition.
Example:If XYZ is acquired by PQR
in a merger where each holder of XYZ stock receives $50 plus 1/2
share of PQR stock for each share of XYZ stock held, XYZ options
might be adjusted to call for the delivery of $5,000 in cash and 50
shares of PQR stock instead of 100 shares of XYZ stock.
When an underlying security is wholly or partially converted into
a debt security or a preferred stock, options that have been
adjusted to call for delivery of the debt security or preferred
stock may, as a general rule, be further adjusted to call for any
securities distributed as interest or dividends on such debt
security or preferred stock.
When an underlying security is converted into a right to receive
a fixed amount of cash, options on that security will generally be
adjusted to require the delivery upon exercise of a fixed amount of
cash, and trading in the options will ordinarily cease when the
conversion becomes effective. As a result, after such an adjustment
is made all options on that security that are not in-the-money will
become worthless and all that are in the money will have no time
value. If the option is European-style (as may be the case for a
flexibly structured stock option designated as a European-style
option), the expiration date of the option will ordinarily be
accelerated to fall on or shortly after the date on which the
conversion of the underlying security to a right to receive cash
occurs. Holders of an in-the-money option whose expiration date is
accelerated must be prepared to exercise that option prior to the
accelerated exercise cut off time in order to prevent the option
from exp! iring unexercised.
There is a section about this subject in chapter 3 of the
"Characteristics and Risks of Standardized Options." You can also
view this information on-line at the following URL: <A
href="http://alert.cboe.com/UM/T.asp?A2.15.1004.3.42484";>http://alert.cboe.com/UM/T.asp?A2.15.1004.3.42484
CBOE.com<FONT
face=Arial size=-1> Stock Splits and Mergers CBOE.com
offers daily information on stock splits, mergers, name changes and
dividend allocations. For example, did you know that on February 22:
<A
href="http://alert.cboe.com/UM/T.asp?A2.15.1004.4.42484";>Rockwell
International Corporation (ROK) changed its name to: Rockwell
Automation, Inc.
<A
href="http://alert.cboe.com/UM/T.asp?A2.15.1004.5.42484";>Tootsie
Roll Industries, Inc. (TR) declared a 3% Stock Dividend.
<A
href="http://alert.cboe.com/UM/T.asp?A2.15.1004.6.42484";>Gilead
Sciences, Inc. (GILD/GDQ) announced a 2-for-1 Stock Split.
For more information, click <A
href="http://alert.cboe.com/UM/T.asp?A2.15.1004.7.42484";>here.
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Strategy
Discussion <A
href="http://www.cboe.com/common/PageViewer.asp?FILE=feb25strategy%2Edoc&DIR=LCWeeklyStrat&HEAD=Weekly+Strategy+Discussion&SEC=6";>Selling
a Cash-Secured Put
Example: You have $6,000 cash available to
purchase stock. XYZ is currently trading at $66.
Outlook: Bullish long-term on XYZ, but you think it is
due for a correction in the short term. You are willing to buy XYZ
if it declines to $60. Selling a put establishes an obligation to
buy stock at a certain price if assigned, and can be used to
establish a position whose purpose is to acquire stock at a specific
price.
Possible Strategy:Cash-Secured Put Sale.
Sell 1 XYZ April 65 Put at 5 ($500.00).
If assigned, you will acquire XYZ at a cost basis of $60 (65
put strike less $500 premium). Click <A
href="http://alert.cboe.com/UM/T.asp?A2.15.1004.8.42484";>here
for details...
A Look Ahead<FONT
face=Arial size=-1> Here are a few important dates to
remember.
March 14:All expiring European index option classes
cease trading.
March 15:Expiring equity, interest rate and American
style indexes cease trading.
March 16:Equity, index and interest rate option
expiration date.
CBOE Bookstore
Special <FONT
color=#0000ff>Don't miss this limited time offer, only at the
CBOE bookstore.
Dow 40,000 - Retail $24.95 - yours free with any order!
$10 OFF orders over $49
And the savings continue...when you take an extra $10 off prices
like these:
McMillan on Options - Reg. $69.95 - Yours for: $49.95
Getting Started in Options - now $13.95
Trading Systems and Methods, 3rd edition - Reg. $85 - Yours:
$59.50
Technical Analysis of Financial Markets - 30% OFF
This offer is for a limited time, so visit our <A
href="http://alert.cboe.com/UM/T.asp?A2.15.1004.9.42484";>store
today.
<FONT
face=Arial color=red size=+1>Ask Us
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* <FONT face=Arial
size=-2>This is a paid advertisement. The inclusion of these
advertisements should not be construed as an endorsement of any
product, service, or Web site or as an indication of the value of
any claims, recommendations or other information contained
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eNews: To find out about
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Options involve risk and
are not suitable for all investors. Prior to buying or selling an
option, a person must receive a copy of Characteristics and Risks of
Standardized Options, available to download at<A
href="http://www.cboe.com/Resources/Intro.asp";>
http://www.cboe.com/Resources/Intro.asp. Copies of this document
are also available from your broker or the Chicago Board Options
Exchange, 400 S. LaSalle Street, Chicago, IL 60605. The OCC
Prospectus contains information on options issued by The Options
Clearing Corporation. Copies of this document are available from The
Options Clearing Corporation, One North Wacker Drive, Suite 500,
Chicago, IL 60606. The documents available discuss exchange-traded
options issued by The Options Clearing Corporation and are intended
for educational purposes. No statement in the documents should be
construed as a recommendation to buy or sell a security or to
provide investment advice.
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