A Precise Way To Hedge The Dow

If your readers are considering put options that "let you stay in the market with the stocks you like, secure in the knowledge that you can't be wiped out if the Dow Jones industrial average heads south," you gave them the second-best advice ("A safety net for your nest egg," Midyear Investments Outlook, June 15).

If you want to hedge against a DJIA decline, put options on the Dow itself would be the vehicle of choice. Options on the Standard & Poor's 500-stock index, which you recommended, would be better for The McGraw-Hill Companies, publisher of business week and owner of Standard & Poor's but otherwise a less precisely targeted solution.

David E. Moran


Dow Jones Indexes

New York

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