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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: oilbabe who wrote (57016)12/16/1999 10:02:00 AM
From: Meridian  Read Replies (1) of 95453
 
How does the OSX Indexing work? For example, if there is a massive short squeeze on the Index holders (options holders), where they have to cover their shorts and buy the OSX, how would this impact the underlying stocks?

In other words, is the Philadelphia exchange (or whoever maintains the index) responsible for arbitrage between the index and the underlying stocks? and if so, in the event of my hypothetical Index short squeeze, will they have to purchase shares in the underlying stocks in the correct proportions? or does buying in the underlying stocks drive price movements in the OSX? Chicken and Egg

gmbler
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