ISE Revere Wal-Mart Supplier Index

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The proprietary ISE-REVERE Wal-Mart Supplier Index tracks the performance of companies that derive a substantial portion of their revenue from Wal-Mart Stores. This is a unique situation in which the world’s largest retailer has spawned a sub-industry of dependent companies, including many that are common household names, including. Mattel, Activision, Energizer Holdings, Hanesbrands, Kellogg's, Clorox Co. and Hasbro are a few of the 30 underlying companies in the Index. The goal of the Index is to be the benchmark of that sub-industry.

Dozens of U.S. exchange-traded companies receive 10%, 20%, even 40% or more of their total revenues from Wal-Mart and its subsidiaries in 13 countries with 1.8 million employees. Interestingly, companies trading on a major U.S. exchange are required to disclose customer relationships accounting for 10% or more of total sales, and that's where Revere Data comes into the picture; through the Revere Relationships database, these company-to-company connections are captured. This database, together with the index methodology forms the basis of the ISE-REVERE Wal-Mart Suppliers Index.

The Index uses a "modified market-cap weighted" methodology due to the diversity in market capitalization size among certain component stocks. It sets the weight of each stock to a multiple of the weight of the smallest stock, based on its market capitalization ranking within the portfolio. The resulting linear weight distribution prevents a few large component stocks from dominating the index while allowing smaller companies to adequately influence index performance. Index components are reviewed semi-annually for eligibility, and the weights are re-set according to that distribution.

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

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.