EFTA01393165.pdf

JUNE 2008 SUPPLEMENT This supplement supersedes and replaces the April 2008 Supplement to the booklet entitled Characteristics and Risks of Standardized Options (the "Booklet"). This supplement adds information regarding the following new options products: delayed start options, binary stock options, binary index options, and range options. The third paragraph on page 1 of the Booklet is replaced with the following paragraph: What is an option? An o ori is the right to buy or sell a specified amount or value of a particular underlying interest at a fixed exercise price by exercising the option before its specified expiration date. An option which gives the right to buy is a call option, and an option which gives a right to sell is a put option. Calls and puts are distinct types of options, and buying or selling of one type does not Involve the other. Certain special kinds of options may give a right to receive a cash payment if certain criteria are met. The last paragraph on page 7 of the Booklet, which continues on the top of page 2, is replaced with the fol- lowing Paragraph: There are two different kinds of options — physical delivery options and cash settled options. A physical delivery option gives its owner the right to receive physi- cal delivery (if it is a call), or to make physical delivery (If it is a put), of the underlying interest when the option is exercised. A cash-settled option other than a binary option or a range option gives its owner the right to receive a cash payment based on the difference between a determined value of the underlying interest at the time the option is exercised and the fixed exercise price of the option. A cash-settled call conveys the right to receive a cash payment if the determined value of the underlying interest at exercise — this value is known as the exercise settlement value — exceeds the exercise price of the option, and a cash-settled put conveys the right to receive a cash payment it the exercise settlement value is less than the exercise price of the option. Binary options and range options are special kinds of cash-settled options described in Chapter II. The examples in this booklet generally refer to options other than binary options or range options except as otherwise stated. 122 CONFIDENTIAL - PURSUANT TOEFEESERMI$066607 P. 6(e) CONFIDENTIAL SDNY_GM_00244791 EFTA01393165