Company: MYI
Filing Date: 2025-08-08
Form Type: PRE 14A
Source: 0001193125-25-176952
Chunk: 175

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-08-08
Form: PRE 14A
Chunk 175
---
 debt security could protect
MVT’s holdings in a security or a number of securities against a substantial decline in the market value. A call option gives the purchaser of the option the right to buy and the seller the obligation to sell the underlying security or index at
the exercise price during the option period or for a specified period prior to a fixed date. The purchase of a call option on a security could protect MVT against an increase in the price of a security that it intended to purchase in the future.

Writing Covered Call Options. MVT is authorized to write (i.e., sell) covered call options with respect to MVT Municipal
Bonds it owns, thereby giving the holder of the option the right to buy the underlying security covered by the option from MVT at the stated exercise price until the option expires. MVT writes only covered call options, which means that so long as
MVT is obligated as the writer of a call option, it will own the underlying securities subject to the option.

MVT receives a premium from
writing a call option, which increases MVT’s return on the underlying security in the event the option expires unexercised or is closed out at a profit. By writing a call, MVT limits its opportunity to profit from an increase in the market
value of the underlying security above the exercise price of the option for as long as MVT’s obligation as a writer continues. Covered call options serve as a partial hedge against a decline in the price of the underlying security. MVT may
engage in closing transactions in order to terminate outstanding options that it has written.

Additional Information About Options. MVT’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

89

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 Office of the Comptroller of the Currency (the “”) 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