The PHLX/KBW Bank Index Option is a capitalization weighted, European style option, composed of 24 geographically diverse. exchange-listed and over-the-counter stocks representing national money center banks and leading regional institutions. The exercise settlement value of BKX is based on the opening prices of the component Issues on the last trading day (usually Friday prior to expiration. The settlement value is disseminated under the symbol BKO.

The KBW Index, on which this option is based, was created in 1 962 and was calculated retroactively to 1 947. The PHLX developed index option began trading in I 99P- any adjustments to the index composition are managed by KBW.

The index option, which trades at approximately one-tenth the value of the KBWI, allows investors to capture investment opportunities created by consolidations in the banking industry and, or to hedge an equity position in financial services stocks. It also enables investors to participate in the dramatically changing landscape of the financial industry without having to select a portfolio of financial institutions, and to benefit from movement in the industry as a whole, rather than having to focus on a particular institution.

Keefe, Bruyette & Woods, Inc. (KBW) is an institutionally oriented securities broker/ dealer and full service investment bank with offices in New York and Hartford. Founded in 1962, KBW specializes in commercial banking and thrift industries, following more than 200 banking and thrift companies on a daily basis. Long recognized as the "Banking Industry Experts:' KBW consistently ranks at the top of Wall Street firms for its equity research on financial stocks.

 
PHLX/Keefe, Bruyette & Woods, Inc.  
Bank Index Component Issues


ONE	Banc One Corporation

BKB	Bank of Boston Corporation

BK	The Bank of New York Company, Inc.

BAC	BankAmerica Corporation

BT	Bankers Trust New York Corporation

BBI	Barnett Banks, Inc.

CMB	The Chase Manhattan Corporation

CHL	Chemical Banking Corporation

cci	Citicorp

CFL	CoreStates Financial Corp

FNB	First Chicago Corporation

FFB	First Fidelity Bancorporation

I	First Interstate Bancorp

FLT	Fleet Financial Group, Inc.

MEL	Mellon Bank Corporation

JPM	J.P. Morgan and Co. Incorporated

NBD	NBC Bancorp, Inc.

NCC	National City Corporation

NB	NationsBank Corporation

NOB	Norwest Corporation

STI	SunTrust Banks, Inc.

USBC	U.S. Bancorp

WB	Wachovia Corporation

WFC     Wells Fargo & Company