ISE-Revere Natural Gas Index

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The International Securities Exchange lists options on a proprietary cash-settled ISE-Revere Natural Gas Index (FUM) that allows investors to take advantage of event-driven news and long-term trends in the natural gas industry. The securities selected for the index derive a substantial portion of their revenues from exploration and production of natural gas.

Related natural gas index instruments

• In February 2007, ISE announced that it had entered into an agreement with First Trust Advisors L.P., an investment management firm, to create and list exchange-traded funds (ETFs) on the ISE-Revere Natural Gas Index.

• Additionally, the U.S. Futures Exchange (USFE) listed a futures contract on the ISE-Revere Natural Gas Index (FFUM) in 2007.

Components, capitalization and weighting

With 30 component stocks, the Index uses an equal-weighted methodology due to the diversity in market capitalization size among the component stocks. The resulting uniform weight distribution prevents a few large component stocks from dominating the index and potentially distorting an index return that is representative of an industry sector. Quarterly rebalancing events are used to “re-set” the weighting of each component so that each component has an equal influence on the index performance.

The Index is calculated and maintained by Standard & Poor’s based on a methodology developed by the ISE and Revere Data in consultation with Standard & Poor’s.

ISE-Revere Natural Gas Option Contract Overview

Full specifications can be found at the ISE web site.

Trading hours	9:30 A.M. - 4:00 P.M. Eastern Time (New York time).
Expiration months	Four near-term months followed by one additional month from the March quarterly cycle (March, June, September and December).
Strike price intervals	At least $2.50.
Minimum trading increments	The minimum trading increment for an options contract trading at less than $3.00 is $0.05. The minimum trading increment for an options contract trading at $3.00 or higher is $0.10.

As of Nov. 1, 2007, there are 31 ISE index options listed.

USFE ISE-Revere Natural Gas Index Futures Contract Overview

Underlying: ISE-Revere Natural Gas™ Index

Quotation	Index Points
Contract Size	$100 per Index Point
Minimum Tick Size	0.05
Minimum Calender Spread Tick Size	0.01
Outright Tick Value	$5
Minimum Size for Block Trade	50 contracts
Mistrade Parameters	30 ticks
Reportable Positions	200 contracts
Position Limits / Accountability	Limits at 25,000 contracts
Screen Price	9999.95
Settlement	Cash Settled