The Nasdaq Stock Market Inc. and the Chicago Board Options Exchange are collaborating to produce a new index.

Nasdaq and the CBOE signed an agreement for the CBOE to calculate and disseminate the CBOE NASDAQ-100 BuyWrite Index. The new index is based on the NASDAQ-100 Index, but it will measure the performance of a theoretical portfolio that sells NASDAQ-100 Index-based call options against a portfolio of the securities comprising the NASDAQ-100.

A buy-write is an investment strategy in which an investor buys stock and also sells call options that correspond to the stock. This strategy can be used to enhance portfolio returns by potentially generating an income from the premiums of the options sold.

The new index is jointly owned by the CBOE and NASDAQ, which is dedicated to creating a wider range of strategy indexes for investors. John Jacobs, executive vice president of NASDAQ Financial Products, said, “The CBOE NASDAQ-100 BuyWrite Index will give investors a strategic opportunity to use a product linked to a portfolio of industry-leading companies. This new benchmark has been developed in response to demand from a wide spectrum of industry interests who have a variety of risk preferences and return requirements.”

“We are very pleased to partner with NASDAQ in offering this exciting new product,” said CBOE chairman and chief executive William Brodsky. “The NASDAQ-100 Index is one of the most recognized and widely followed indexes in the world, and by joining it with CBOE’s proprietary, buy-write methodology, we have created a product that will provide portfolio managers and investors of all sizes with an important new benchmark against which to measure the performance of a buy-write strategy or fund.”