To millions of stock investors, THE MARKET has always meant the New York Stock Exchange. This is only natural because the NYSE is the primary market for shares of the vast majority of the most widely held, actively traded and most highly capitalized companies - and, therefore, the most closely watched MARKET in the world.

To keep its reputation as THE MARKET and to continue earning the business which created that image, the NYSE has maintained a tradition of superior trading liquidity, superior service, continually improving technology, and participating in promising stock market innovations.

Stock index options continue to show such promise, because they provide a myriad of new ways to participate in THE MARKET. The New York Stock Exchange trades options on the New York Stock Exchange Composite Index- - the only well-known and widely followed index which uses all 1600 + New York Stock Exchange listed common stocks to measure THE MARKET.

Listed stock options, a close relative and forerunner of stock index options, have the proven ability to help investors control the risks and rewards of investing in individual common stocks. But what is missing with listed stock options for many investors and traders, large and small, is the ability to translate market opinions into immediate action without the delays inherent in analyzing and developing strategies for a variety of individual stocks.

Stock index options are designed to fill that need. They enable investors and traders who have market opinions or fears to quickly adjust their exposure to market risk, and to position themselves for possible market profits just as quickly. If you've ever been 'right about the market' but 'wrong on the stock,' NYSE Composite Index- (NYA) options may be for you. Or, if you have been right about stocks but have found short-term market reverses limiting your profits, NYSE Composite Index- (NYA) options may be for you. However, although stock index options can be useful in a very wide variety of investment situations, they are not for everyone.

This booklet describes New York Stock Exchange Composite Index", (NYA) options, explains the risks associated with them, and explains how they can be used to seek profits or reduce risk in THE MARKET for common stocks. Readers are presumed to possess a basic knowledge of listed stock options and of index options.

For purposes of brevity and clarity, we have omitted such factors as transaction costs, taxes, and margins from the discussion. They are, of course, important and should be considered before engaging in a stock index option transaction. In addition, the disclosure document of The Options Clearing Corporation, 'Characteristics & Risks of Standardized Options,' must be read before engaging in an index option transaction.