The Wilshire Small Cap Index measures the performance of the small capitalization sector of the United States equity market. It is a market- weighted index comprised of 250 stocks, and is designed to be a trading instrument for institutional and individual investors. Component issues were chosen on the basis of market capitalization, liquidity, and industry group representation. The Small Cap Index originates from the Wilshire Next 1750 Index, a benchmark for institutional investors in the small cap sector.

In 1991, the Pacific Stock Exchange teamed with Wilshire Associates Incorporated, developers of the Wilshire Next 1750, to design a reliable index of small cap performance specifically for trading purposes. In order to be useful to traders, the new index had to resolve the structural flaws that had hampered other small cap indices. It had to include a minimal number of companies offering high liquiditn, and minimal annual turnover. In addition, it had to include underlying issues fitting the market's definition of the small cap segment. Proxride broad representation of industn- sectors. Demonstrate high correlation with existing benchmarks, such as the Wilshire Next 1750.

The Wilshire Small Cap Index achienes those goals. Wilshire Associates - a leading provider of analytical, consulting, and asset management services to investment and retirement fund managers - has developed several major market indices using sophisticated computer models. Wilshire applied both its experience and its technology to the construction of the Small Cap Index. Drawing on historical data, the firm first created an index of 250 small cap companies that would meet its design criteria in 1980. Once the initial index was created, changes were made "annually" over the succeeding 12 years to reflect changes in the composition of Wilshire's Next 1750 Index. Thus Wilshire has provided a 12-year track record of the index's performance - and has created a trading instrument with unprecedented design integrity

Wilshire Small Cap Index options at the Pacific Stock Exchange offer an efficient way of participating in the small cap market with trust and confidence. In addition, the Chicago Board of Trade offers futures trading on the index, greatly increasing hedging and trading opportunities.