Company: MYI
Filing Date: 2025-08-08
Form Type: PRE 14A
Source: 0001193125-25-176952
Chunk: 179

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-08-08
Form: PRE 14A
Chunk 179
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 defensive posture without reducing the yield on its investments beyond any amounts required to engage in futures trading.

When
MVT intends to purchase a security, MVT may purchase futures contracts as a hedge against any increase in the cost of such security resulting from a decrease in interest rates or otherwise, that may occur before such purchase can be effected.
Subject to the degree of correlation between such securities and the futures contracts, subsequent increases in the cost of such securities should be reflected in the value of the futures held by MVT. As such purchases are made, an equivalent amount
of futures contracts will be closed out. Due to changing market conditions and interest rate forecasts, however, a futures position may be terminated without a corresponding purchase of portfolio securities.

Call Options on Futures Contracts. MVT may also purchase and sell exchange traded call and put options on financial futures contracts.
The purchase of a call option on a futures contract is analogous to the purchase of a call option on an individual security. Depending on the pricing of the option compared to either the futures contract upon which it is based or the price of the
underlying securities, it may or may not be less risky than ownership of the futures contract or underlying securities. Like the purchase of a futures contract, MVT may purchase a call option on a futures contract to hedge against a market advance
when MVT is not fully invested.

The writing of a call option on a futures contract constitutes a partial hedge against declining prices
of the securities which are deliverable upon exercise of the futures contract. If the futures price at expiration is below the exercise price, MVT will retain the full amount of the option premium which provides a partial hedge against any decline
that may have occurred in MVT’s portfolio holdings.

Put Options on Futures Contracts. The purchase of a put option on a
futures contract is analogous to the purchase of a protective put option on portfolio securities. MVT may purchase a put option on a futures contract to hedge MVT’s portfolio against the risk of rising interest rates.

The writing of a put option on a futures contract constitutes a partial hedge against increasing prices of the securities which are
deliverable upon exercise of the futures contract. If the futures price at expiration is higher than the exercise

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price, MVT will retain the full amount of the option premium which provides a partial hedge against any increase in the price of securities which MVT intends to purchase.

The writer of an option on a futures contract is required to deposit initial and variation margin pursuant to requirements similar to those
applicable