Information Notice - November 12, 2008

September 2008 Supplement to the Options Disclosure Document

Executive Summary

On September 19, 2008, the SEC approved a supplement to the Options Disclosure Document (ODD). The ODD contains general disclosures on the characteristics and risks of trading standardized options. The recently approved supplement reflects changes to disclosure regarding certain options on variability indexes1 and strategy-based indexes. In addition, the supplement also contains disclosures regarding the adjustment of stock option contracts to reflect cash dividends or distributions on the underlying securities. As with other supplements to the ODD, this should be read in conjunction with the current ODD entitled Characteristics and Risks of Standardized Options. 

 

1 The term "variability indexes" refers to implied volatility, realized variance, and realized volatility indexes.