Company: MYI
Filing Date: 2025-09-08
Form Type: DEF 14A
Source: 0001193125-25-198172
Chunk: 196

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-08
Form: DEF 14A
Chunk 196
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 securities.

Call Options on Futures Contracts. MIY 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, MIY may purchase a call option on a futures contract to hedge against a market advance when MIY 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, MIY will retain the full amount of the option premium, which provides a partial hedge against any decline that may have occurred in
MIY’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. MIY may purchase a put option on a futures contract to hedge MIY’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 price, MIY will retain the full amount of the option premium, which provides a partial hedge against any increase in the price of
securities which MIY 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 to futures contracts. Premiums received from the writing of an option will be included in initial margin. The writing of an option on a futures contract involves risks similar to those
relating to futures contracts.

The CFTC subjects advisers to registered investment companies to regulation by the CFTC if a fund that is
advised by the investment adviser either (i) invests, directly or indirectly, more than a prescribed level of its liquidation value in CFTC Derivatives, or (ii) markets itself as providing investment exposure to such instruments. To the
extent MIY uses CFTC Derivatives, it intends to do so below such prescribed levels and will not market itself as a “commodity