The Utility Index Option is a capitalization weighted, European style option. The exercise settlement value of the UTY is based on the closing prices of the component Issues on the last trading day (usually Friday) prior to expiration. The Utility Index consists of 20 geographically diverse public utility stocks listed on the New York Stock Exchange. This PHLX created index began trading in 1 987.

Utility stocks are considered to be defensive investments because their growth rates are stable during recessions and expansions in the economy, These stocks provide a haven for investors who fear recession and volatile returns on investment (whether savings or otherwise). Utility stocks tend to pay high cash dividends, a portion of which may be tax exempt. Utility stocks differ dramatically from other industry sectors not only in how they perform, but also in how they react to market conditions. Therefore, attempting to hedge utility stocks with a broad market index exposes investors to unnecessary risk and falls to hedge or track the performance of the utility sector.

 Utility Index Component Issues


AEP	American Electric Power Company, Inc.

CX	Centerior Energy Corporation

CWE	Commonwealth Edison Company

ED	Consolidated Edison Company of NY, Inc.

DTE	The Detroit Edison Company

D	Dominion Resources, Inc.

DUK	Duke Power Company

FPL	FPL Group, Inc.

HOU	Houston Industries Incorporated

NMK	Niagara Mohawk Power Corporation

NU	Northeast Utilities

DEC	Ohio Edison Company

PCG	Pacific Gas and Electric Company

PPW	PacifiCorp

PE	Philadelphia Electric Company

PEG	Public Service Enterprise Group Inc.

SCE	SCEcorp

SO	The Southern Company

TXU	Texas Utilities Company

UEP	Union Electric Company