obligati:mfg. of one or more specified issuers or guarantors. each of which is called a reference entity. The reference obligation(s) and each reference entity for a class of credit default options are selected by the listing options market. When a credit default option is based on reference obligation(s) of more than one issuer or guarantor, it Is referred to as a credit default basket option. There are further variations on credit default basket options as described below. A credit default option is automatically exercised and pays a fixed cash settlement amount if a credit event is confirmed for one or more reference obligations of a reference entity prior to expiration of the option. The reference obligations of a reference entity may include all of the outstanding debt securities constituting general obligations of the reference entity or direct claims on the reference entities (excluding any nonrecourse debt). A credit event may include a failure to make a payment on a reference obligation andfor any other event(s) that the listing options market may specify at the time a class of credit default options is listed. The specified credit event(s) will be defined in accordance with the terms of the reference obligation(s). However, not every event that might constitute an event of default by the reference entity under the terms of the reference obligations will necessanly be specified by the listing options market as a credit event. Investors should be certain that they understand the various possible events that will or will not constitute credit events. The determination of whether a particular event meets the criteria of a credit event, however defined, for a specific credit default option is within the sole discretion of the listing options market. In order to result in automatic exercise of the option, a credit event must be confirmed to have occurred during the covered period (i.e., the period between the initial listing of