Company: MYI
Filing Date: 2025-08-08
Form Type: PRE 14A
Source: 0001193125-25-176952
Chunk: 196

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-08-08
Form: PRE 14A
Chunk 196
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 underlying security above the exercise price of the option for as long as MIY’s obligation as a writer continues. Covered call options serve as a partial hedge against a decline in the price of the underlying
security. MIY may engage in closing transactions in order to terminate outstanding options that it has written.

Additional Information About Options. MIY’s ability to close out its position as a purchaser or seller of an exchange-listed put or call option is dependent upon the existence of a liquid secondary market on option exchanges. Among the possible reasons for the
absence of a liquid secondary market on an exchange are: (i) insufficient trading interest in certain options; (ii) restrictions on transactions imposed by an exchange; (iii) trading halts, suspensions or other restrictions imposed
with respect to particular classes or series of options or underlying securities; (iv) interruption of the normal operations on an exchange; (v) inadequacy of the facilities of an exchange or the Office of the Comptroller of the Currency
(“”) to handle current trading volume; or (vi) a decision by one or more exchanges to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that exchange (or
in that class or series of options) would cease to exist, although outstanding options on that exchange that had been listed by the OCC as a result of trades on that exchange would generally continue to be exercisable in accordance with their terms.
OTC options are purchased from or sold to dealers, financial institutions or other counterparties which have entered into direct agreements with MIY. With OTC options, such variables as expiration date, exercise price

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and premium will be agreed upon between MIY and the counterparty, without the intermediation of a third party such as the OCC. If the counterparty fails to make or take delivery of the securities
underlying an option it has written, or otherwise settle the transaction in accordance with the terms of that option as written, MIY would lose the premium paid for the option as well as any anticipated benefit of the transaction. OTC options and
assets used to cover OTC options written by MIY are considered by the staff of the SEC to be illiquid. The illiquidity of such options or assets may prevent a successful sale of such options or assets, result in a delay of sale, or reduce the amount
of proceeds that might otherwise be realized.

MIY may engage in options and futures transactions on exchanges and options in