New Type of Security Hits Market: Regulators...

New Type of Security Hits Market: Regulators have authorized three exchanges to sell a new type of security that allows investors to bet on the direction of the stock market as a whole rather than purchasing individual stocks. Two of the exchanges--the American Stock Exchange and the Philadelphia Stock Exchange--immediately began trading the instruments, known as stock baskets. Amex calls its product an Equity Index Participation and Philadelphia’s is a Cash Index Participation. The instruments are priced to reflect increases and declines in broad market indexes such as the Standard & Poor’s 500-stock index. In the first day of trading, the Amex product recorded sales of 4.3 million participations, representing volume of about $135 million. In Philadelphia volume amounted to $1.7 million.