INVESCO GROWTH FUND, INC.

                 Supplement to Prospectus dated January 1, 1997

         The  Section  of  the  above  Fund's  Prospectus  entitled  "Investment
Objective and Policies" is amended to add the following  paragraph at the end of
the Section:

     Options and Futures.  Each Portfolio,  other than the INVESCO Environmental
     Services  Portfolio,  may write,  purchase or sell put and call  options on
     individual  securities,  security  indexes  and  currencies,  or  financial
     futures or options on  financial  futures,  or undertake  forward  currency
     contracts.  These practices and their risks are discussed under "Investment
     Policies and Restrictions" in the Statement of Additional Information.

The date of this Supplement is November 3, 1997.










                            INVESCO GROWTH FUND, INC.

     Supplement to Statement of Additional Information dated January 1, 1997

The  Section  of  the  Fund's  Statement  of  Additional   Information  entitled
"Investment  Policies and  Restrictions"  is hereby amended to add the following
language after "Investment Policies and Restrictions - Lending of Securities":

          The  Growth  Fund has  adopted  a policy  which  permits  it to write,
     purchase, or sell put and call options on individual securities, securities
     indexes  and  currencies,  or  financial  futures or  options on  financial
     futures, or undertake forward currency contracts.

          Put and Call Options.  An option on a security provides the purchaser,
     or "holder," with the right,  but not the obligation,  to purchase,  in the
     case of a "call"  option,  or  sell,  in the  case of a "put"  option,  the
     security or securities underlying the option, for a fixed exercise price up
     to a stated  expiration  date.  The holder pays a  non-refundable  purchase
     price for the option,  known as the  "premium."  The maximum amount of risk
     the  purchaser  of the option  assumes is equal to the premium plus related
     transaction costs,  although the entire amount may be lost. The risk of the
     seller, or "writer," however, is potentially  unlimited,  unless the option
     is  "covered,"  which  is  generally   accomplished  through  the  writer's
     ownership of the underlying security,  in the case of a call option, or the
     writer's  segregation  of an  amount  of cash or  securities  equal  to the
     exercise price, in the case of a put option. If the writer's  obligation is
     not so  covered,  it is subject to the risk of the full  change in value of
     the underlying security from the time the option is written until exercise.

          Upon  exercise  of the  option,  the  holder  is  required  to pay the
     purchase price of the underlying security, in the case of a call option, or
     to deliver the security in return for the purchase  price, in the case of a
     put option.  Conversely, the writer is required to deliver the security, in
     the case of a call option,  or to purchase the  security,  in the case of a
     put option.  Options on securities which have been purchased or written may
     be  closed  out  prior  to  exercise  or  expiration  by  entering  into an
     offsetting  transaction  on the exchange on which the initial  position was
     established, subject to the availability of a liquid secondary market.

          Options on  securities  are traded on national  securities  exchanges,
     such as the  Chicago  Board of  Options  Exchange  and the New  York  Stock
     Exchange,  which are regulated by the Securities  and Exchange  Commission.
     The Options Clearing  Corporation  guarantees the performance of each party
     to an exchange-traded option, by in effect taking the opposite side of each
     such   option.   A  holder  or  writer  may  engage  in   transactions   in
     exchange-traded  options on securities and options on indices of securities
     only through a registered  broker/dealer  which is a member of the exchange
     on which the option is traded.

          An option position in an exchange-traded option may be closed out only
     on an exchange which provides a secondary  market for an option of the same
     series.  Although  the Fund will  generally  purchase  or write  only those
     options for which there appears to be an active secondary market,  there is
     no assurance that a liquid  secondary  market on an exchange will exist for
     any   particular option at any particular time. In  such  event  it   might
     not   be    possible     to     effect     closing     transactions      in







     a    particular    option    with   the  result   that   the   Fund   would
     have to  exercise  the option in order to realize  any  profit.  This would
     result in the Fund's incurring  brokerage  commissions upon the disposition
     of underlying  securities acquired through the exercise of a call option or
     upon the  purchase  of  underlying  securities  upon the  exercise of a put
     option.  If the Fund as covered  call  option  writer is unable to effect a
     closing  purchase  transaction  in a secondary  market,  unless the Fund is
     required  to  deliver  the  securities  pursuant  to the  assignment  of an
     exercise notice, it will not be able to sell the underlying  security until
     the option expires.

          Reasons for the potential  absence of a liquid  secondary market on an
     exchange  include  the  following:  (i) there may be  insufficient  trading
     interest  in  certain  options;  (ii)  restrictions  may be  imposed  by an
     exchange on opening  transactions or closing  transactions  or both;  (iii)
     trading  halts,  suspensions  or other  restrictions  may be  imposed  with
     respect  to   particular   classes  or  series  of  options  or  underlying
     securities;  (iv) unusual or unforeseen  circumstances may interrupt normal
     operations on an exchange;  (v) the facilities of an exchange or a clearing
     corporation  may not at all times be  adequate  to handle  current  trading
     volume; or (vi) one or more exchanges could, for economic or other reasons,
     decide or be  compelled at some future date to  discontinue  the trading of
     options  (or  particular  class or series of  options)  in which  event the
     secondary  market on that  exchange  (or in the class or series of options)
     would cease to exist,  although  outstanding options on that exchange which
     had been  issued by a  clearing  corporation  as a result of trades on that
     exchange would  continue to be exercisable in accordance  with their terms.
     There is no  assurance  that higher than  anticipated  trading  activity or
     other unforeseen  events might not, at a particular time, render certain of
     the facilities of any of the clearing  corporations  inadequate and thereby
     result in the  institution by an exchange of special  procedures  which may
     interfere  with the timely  execution of customers'  orders.  However,  the
     Options  Clearing  Corporation,  based on  forecasts  provided  by the U.S.
     exchanges,  believes that its  facilities are adequate to handle the volume
     of reasonably  anticipated  options  transactions,  and such exchanges have
     advised such clearing  corporation  that they believe their facilities will
     also be  adequate  to  handle  reasonably  anticipated  volume.  For a more
     complete discussion of the risks involved in futures and options on futures
     and other securities, refer to Appendix B ("Description of Futures, Options
     and Forward Contracts").

          Futures and Options on Futures. As described in the Fund's Prospectus,
     the Fund may enter into futures contracts,  and purchase and sell ("write")
     options to buy or sell  futures  contracts.  The Fund will  comply with and
     adhere to all  limitations  in the  manner  and  extent to which it effects
     transactions  in futures and options on such futures  currently  imposed by
     the rules and policy guidelines of the Commodity Futures Trading Commission
     ("CFTC") as  conditions  for  exemption  of a mutual  fund,  or  investment
     advisers thereto,  from registration as a commodity pool operator.  No Fund
     will, as to any positions,  whether long,  short or a combination  thereof,
     enter into  futures and options  thereon  for which the  aggregate  initial
     margins and premiums exceed 5% of the fair market value of its assets after
     taking into account unrealized profits and losses on options it has entered
     into.  In the case of an option that is  "in-the-money,"  as defined in the
     Commodity Exchange Act (the "CEA"), the in-the-money amount may be excluded
     in  computing   such  5%.  (In  general  a  call  option  on  a  future  is
     "in-the-money"  if the value of the future exceeds the exercise  ("strike")
     price  of   the   call;   a   put   option   on  a future is "in-the-money"







     if the value of the future  which is the  subject of the put is exceeded by
     the strike price of the put.) The  Fund may use futures and options thereon
     solely for bona fide hedging or for other  non-speculative  purposes within
     the meaning and intent of the applicable provisions of the CEA.

          Unlike when the Fund  purchases or sells a security,  no price is paid
     or  received by the Fund upon the  purchase or sale of a futures  contract.
     Instead,  the Fund will be  required  to  deposit in its  segregated  asset
     account an amount of cash or qualifying securities (currently U.S. Treasury
     bills),  currently in a minimum amount of $15,000.  This is called "initial
     margin." Such initial margin is in the nature of a performance bond or good
     faith deposit on the contract.  However, since losses on open contracts are
     required to be reflected in cash in the form of variation  margin payments,
     a Fund may be required to make  additional  payments during the term of the
     contracts to its broker.  Such  payments  would be  required,  for example,
     where,  during the term of an interest rate futures  contract  purchased by
     the Fund,  there was a general  increase in interest rates,  thereby making
     the Fund's portfolio  securities less valuable.  In all instances involving
     the purchase of futures  contracts by the Fund,  an amount of cash together
     with  such  other   securities  as  permitted  by   applicable   regulatory
     authorities  to be utilized for such purpose,  at least equal to the market
     value of the futures  contracts,  will be deposited in a segregated account
     with the Fund's custodian to collateralize the position.  At any time prior
     to the  expiration of a futures  contract,  the Fund may elect to close its
     position by taking an opposite position which will operate to terminate its
     position in the futures  contract.  For a more  complete  discussion of the
     risks  involved in futures  and  options on futures  and other  securities,
     refer  to  Appendix  B  ("Description  of  Futures,   Options  and  Forward
     Contracts").

          Where futures are  purchased to hedge  against a possible  increase in
     the price of a  security  before the Fund is able in an orderly  fashion to
     invest in the security, it is possible that the market may decline instead.
     If the Fund, as a result,  concluded not to make the planned  investment at
     that time because of concern as to possible  further  market decline or for
     other reasons,  the Fund would realize a loss on the futures  contract that
     is not offset by a reduction in the price of securities purchased.

          In  addition  to  the  possibility  that  there  may  be an  imperfect
     correlation  or no  correlation  at all  between  movements  in the futures
     contracts  and the  portion of the  portfolio  being  hedged,  the price of
     futures may not  correlate  perfectly  with  movements in the prices due to
     certain  market  distortions.  All  participants  in the futures market are
     subject to margin deposit and maintenance requirements. Rather than meeting
     additional  margin  deposit  requirements,   investors  may  close  futures
     contracts through  offsetting  transactions  which could distort the normal
     relationship  between  underlying  instruments and the value of the futures
     contract. Moreover, the deposit requirements in the futures market are less
     onerous than margin requirements in the securities market and may therefore
     cause increased  participation  by speculators in the futures market.  Such
     increased participation may also cause temporary price distortions.  Due to
     the  possibility  of price  distortion in the futures market and because of
     the imperfect  correlation  between movements in the underlying  instrument
     and  movements  in the  prices of futures  contracts,  the value of futures
     contracts as a hedging device may be reduced.








          In addition, if the Fund has  insufficient  available  cash, it may at
     times have to sell securities to meet variation margin  requirements.  Such
     sales may have to be effected at a time when it may be  disadvantageous  to
     do so.

          Options  on  Futures Contracts.  The Fund may buy and write options on
     futures contracts for hedging purposes.  The purchase of a call option on a
     futures  contract  is similar in some  respects  to the  purchase of a call
     option on an  individual  security.  Depending on the pricing of the option
     compared to either the price of the futures contract upon which it is based
     or the price of the underlying  instrument,  ownership of the option may or
     may not be  less  risky  than  ownership  of the  futures  contract  or the
     underlying instrument.  As with the purchase of futures contracts, when the
     Fund is not fully  invested it may buy a call option on a futures  contract
     to hedge against a market advance.

          The  writing  of a call  option on a futures  contract  constitutes  a
     partial hedge against  declining prices of the security or foreign currency
     which  is  deliverable  under,  or of the  index  comprising,  the  futures
     contract. If the futures price at the expiration of the option is below the
     exercise price,  the Fund will retain the full amount of the option premium
     which  provides a partial  hedge against any decline that may have occurred
     in the Fund's portfolio holdings.  The writing of a put option on a futures
     contract  constitutes  a partial  hedge  against  increasing  prices of the
     security or foreign  currency which is deliverable  under,  or of the index
     comprising, the futures contract. If the futures price at expiration of the
     option is higher  than the  exercise  price,  the Fund will retain the full
     amount of the option  premium  which  provides a partial  hedge against any
     increase in the price of securities  which the Fund is considering  buying.
     If a call or put option which the Fund has written is  exercised,  the Fund
     will incur a loss  which  will be  reduced by the amount of the  premium it
     received.  Depending on the degree of  correlation  between  changes in the
     value of its portfolio  securities  and changes in the value of the futures
     positions,  the Fund's losses from existing  options on futures may to some
     extent be  reduced  or  increased  by  changes  in the  value of  portfolio
     securities.

          The purchase of a put option on a futures  contract is similar in some
     respects to the purchase of protective put options on portfolio securities.
     For example,  the Fund may buy a put option on a futures  contract to hedge
     its portfolio against the risk of falling prices.

          The  amount  of risk  the Fund  assumes  when it buys an  option  on a
     futures   contract  is  the  premium  paid  for  the  option  plus  related
     transaction  costs. In addition to the correlation  risks discussed  above,
     the  purchase of an option also  entails the risk that changes in the value
     of the underlying futures contract will not be reflected fully in the value
     of the options bought.


The  Section  of  the  Fund's  Statement  of  Additional   Information  entitled
"Investment Policies and Restrictions - Investment Restrictions" contains a list
of investment  restrictions.  That list has been amended and restated to real as
follows:

               (1)  issue preference shares or create any funded debt;

               (2)  sell short or buy on margin,  except for the Fund's purchase
                    or sale of options or  futures,  or writing,  purchasing  or
                    selling puts and calls;







                           

               (3)* borrow  money  except from banks,  and then not in excess of
                    5% of the value of its total assets, and only as a temporary
                    measure for emergency purposes;

               (4)  invest in the  securities  of any other  investment  company
                    except for a purchase or  acquisition  in accordance  with a
                    plan of reorganization, merger or consolidation;

               (5)  purchase securities if the purchase would cause the Fund, at
                    the  time,  to have  more  than 5% of the value of its total
                    assets  invested in the  securities of any one company or to
                    own  more  than  10% of the  voting  securities  of any  one
                    company (except obligations issued or guaranteed by the U.S.
                    Government)'

               (6)  make loans to any person,  except  through  the  purchase of
                    debt  securities  in accordance  with the Fund's  investment
                    policies,   or  the  lending  of  portfolio   securities  to
                    broker-dealers  or  other  institutional  investors,  or the
                    entering into repurchase agreements with member banks of the
                    Federal  Reserve  System,   registered   broker-dealers  and
                    registered  government  securities  dealers.  The  aggregate
                    value of all  portfolio  securities  loaned  may not  exceed
                    33-1/3% of the Fund's total assets (taken at current value).
                    No more than 10% of the Fund's  total assets may be invested
                    in repurchase agreements maturing in more than seven days;

               (7)  buy or sell commodities,  commodity contracts or real estate
                    (however,  the Fund may  purchase  securities  of  companies
                    which invest in the foregoing).  This restriction  shall not
                    prevent  the Fund from  purchasing  or  selling  options  on
                    individual securities,  security indexes, and currencies, or
                    financial  futures  or  options  on  financial  futures,  or
                    undertaking forward currency contracts;

               (8)  invest in any company for the purpose of exercising  control
                    or management;

               (9)  buy other than readily marketable securities;

               (10) engage in the underwriting of any securities;

               (11) purchase  securities  of any company in which any officer or
                    director  of the Fund or its  investment  adviser  owns more
                    than 1/2 of 1% of the  outstanding  securities,  or in which
                    all of the  officers  and  directors  of the  Fund  and  its
                    investment  adviser,  as a group,  own more  than 5% of such
                    securities;

               (12) invest more than 25% of the value of the Fund's total assets
                    in one particular industry.

          The  restrictions  set forth  above may not be changed  without  prior
     approval by the  holders of a majority,  as defined in the 1940 Act, of the
     outstanding shares of the Fund.







         

     *The Fund has never  borrowed  money for  other  than  temporary  cash flow
     purposes and has no intention of doing so in the foreseeable  future unless
     unexpected  developments  make  borrowing  of money by the Fund  under this
     fundamental  investment restriction desirable in order to allow the Fund to
     meet its obligation (e.g., processing redemptions in a timely manner).

          With  respect  to  investment  restriction  (9)  above,  the  board of
     directors has delegated to the Fund's  investment  adviser the authority to
     determine whether a liquid market exists for securities eligible for resale
     pursuant to Rule 144A under the Securities Act of 1933, or any successor to
     such rule,  and that such  securities  are not subject to  restriction  (9)
     above. Under guidelines established by the board of directors,  the adviser
     will  consider  the  following  factors,   among  others,  in  making  this
     determination: (1) the unregistered nature of a Rule 144A security; (2) the
     frequency of trades and quotes for the security;  (3) the number of dealers
     willing to purchase or sell the security and the number of other  potential
     purchasers;  (4) dealer undertakings to make a market in the security;  and
     (5) the nature of the security and the nature of marketplace  trades (e.g.,
     the time needed to dispose of the security, the method of soliciting offers
     and the mechanics of transfer).

          In  applying  restriction  (12)  above,  the  Fund  uses  an  industry
     classification  system based on O'Neil Database published by William O'Neil
     & Co., Inc.

          Under the 1940 Act, Fund  directors  and officers  cannot be protected
     against  liability to the Fund or its  shareholders  to which they would be
     subject  because of willful  misfeasance,  bad faith,  gross  negligence or
     reckless disregard of duties of their office.

          Additional  investment  restrictions adopted by the Fund and which may
     be changed by the Directors at their discretion  provided that the Fund may
     not:

               (1)  (a) enter into any  futures  contracts,  options on futures,
                    puts  and  calls if  immediately  thereafter  the  aggregate
                    margin deposits on all outstanding derivative positions held
                    by the  Fund and  premiums  paid on  outstanding  positions,
                    after  taking into  account  unrealized  profits and losses,
                    would  exceed 5% of the market  value of the total assets of
                    the Fund, or (b) enter into any derivative  positions if the
                    aggregate  net  amount  of  the  Fund's   commitments  under
                    outstanding  derivative  positions  of the Fund would exceed
                    the market value of the total assets of the Fund.










APPENDIX B

DESCRIPTION OF FUTURES, OPTIONS AND FORWARD CONTRACTS

Options on Securities

         An option on a security  provides the purchaser,  or "holder," with the
right, but not the obligation,  to purchase,  in the case of a "call" option, or
sell, in the case of a "put" option,  the security or securities  underlying the
option,  for a fixed exercise price up to a stated  expiration  date. The holder
pays a non-refundable purchase price for the option, known as the "premium." The
maximum  amount of risk the  purchaser  of the  option  assumes  is equal to the
premium plus related transaction costs,  although the entire amount may be lost.
The risk of the seller, or "writer," however, is potentially  unlimited,  unless
the option is "covered,"  which is generally  accomplished  through the writer's
ownership  of the  underlying  security,  in the case of a call  option,  or the
writer's  segregation  of an amount of cash or securities  equal to the exercise
price,  in the  case  of a put  option.  If the  writer's  obligation  is not so
covered, it is subject to the risk of the full change in value of the underlying
security from the time the option is written until exercise.

         Upon exercise of the option, the holder is required to pay the purchase
price of the underlying  security,  in the case of a call option,  or to deliver
the  security  in return for the  purchase  price,  in the case of a put option.
Conversely,  the writer is required to deliver  the  security,  in the case of a
call option, or to purchase the security,  in the case of a put option.  Options
on  securities  which have been  purchased or written may be closed out prior to
exercise  or  expiration  by  entering  into an  offsetting  transaction  on the
exchange  on  which  the  initial  position  was  established,  subject  to  the
availability of a liquid secondary market.

         Options on securities are traded on national securities exchanges, such
as the Chicago Board of Options Exchange and the New York Stock Exchange,  which
are regulated by the Securities and Exchange  Commission.  The Options  Clearing
Corporation  guarantees  the  performance  of each  party to an  exchange-traded
option,  by in effect taking the opposite side of each such option.  A holder or
writer may engage in transactions in  exchange-traded  options on securities and
options on indices of securities only through a registered  broker/dealer  which
is a member of the exchange on which the option is traded.

         An option position in an exchange-traded  option may be closed out only
on an  exchange  which  provides  a  secondary  market for an option of the same
series.  Although the Fund will  generally  purchase or write only those options
for which there appears to be an active secondary market,  there is no assurance
that a liquid  secondary  market on an  exchange  will exist for any  particular
option at any particular  time. In such event it might not be possible to effect
closing  transactions in a particular option with the result that the Fund would
have to exercise the option in order to realize any profit. This would result in
the Fund's  incurring  brokerage  commissions upon the disposition of underlying
securities  acquired  through the exercise of a call option or upon the purchase
of  underlying  securities  upon the  exercise of a put  option.  If the Fund as
covered call option writer is unable to effect a closing purchase transaction in
a  secondary  market,  unless the Fund is  required  to deliver  the  securities
pursuant to the  assignment of an exercise  notice,  it will not be able to sell
the underlying security until the option expires.








         Reasons for the potential  absence of a liquid  secondary  market on an
exchange include the following:  (i) there may be insufficient  trading interest
in certain options;  (ii)  restrictions may be imposed by an exchange on opening
transactions or closing  transactions or both; (iii) trading halts,  suspensions
or other  restrictions  may be imposed  with  respect to  particular  classes or
series  of  options  or  underlying  securities;   (iv)  unusual  or  unforeseen
circumstances may interrupt normal operations on an exchange; (v) the facilities
of an  exchange  or a clearing  corporation  may not at all times be adequate to
handle current trading volume; or (vi) one or more exchanges could, for economic
or other reasons,  decide or be compelled at some future date to discontinue the
trading of options (or particular class or series of options) in which event the
secondary  market on that exchange (or in the class or series of options)  would
cease to exist,  although  outstanding  options on that exchange  which had been
issued by a clearing  corporation  as a result of trades on that exchange  would
continue to be exercisable in accordance with their terms. There is no assurance
that higher than anticipated  trading activity or other unforeseen  events might
not,  at a  particular  time,  render  certain of the  facilities  of any of the
clearing  corporations  inadequate and thereby  result in the  institution by an
exchange of special  procedures which may interfere with the timely execution of
customers' orders. However, the Options Clearing Corporation, based on forecasts
provided by the U.S.  exchanges,  believes that its  facilities  are adequate to
handle the  volume of  reasonably  anticipated  options  transactions,  and such
exchanges  have  advised  such  clearing  corporation  that they  believe  their
facilities will also be adequate to handle reasonably anticipated volume.

         In  addition,  options  on  securities  may be traded  over-the-counter
through financial institutions dealing in such options as well as the underlying
instruments.  OTC options are  purchased  from or sold  (written)  to dealers or
financial  institutions  which have entered into direct  agreements with a Fund.
With OTC options,  such variables as expiration date, exercise price and premium
will be agreed  upon  between a Fund and the  transacting  dealer,  without  the
intermediation of a third party such as the OCC. If the transacting dealer fails
to make or take delivery of the securities  underlying an option it has written,
in accordance with the terms of that option as written,  the Fund would lose the
premium  paid  for  the  option  as  well  as  any  anticipated  benefit  of the
transaction.  A Fund will engage in OTC option  transactions  only with  primary
U.S. Government securities dealers recognized by the Federal Reserve Bank of New
York.

Futures Contracts

         A Futures Contract is a bilateral  agreement providing for the purchase
and sale of a  specified  type and amount of a financial  instrument  or foreign
currency,  or for the making and  acceptance of a cash  settlement,  at a stated
time in the future, for a fixed price. By its terms, a Futures Contract provides
for a  specified  settlement  date on  which,  in the  case of the  majority  of
interest  rate  and  foreign  currency  futures  contracts,   the  fixed  income
securities or currency  underlying  the contract are delivered by the seller and
paid for by the  purchaser,  or on  which,  in the case of stock  index  futures
contracts and certain interest rate and foreign currency futures contracts,  the
difference  between the price at which the  contract  was  entered  into and the
contract's  closing  value is settled  between the purchaser and seller in cash.
Futures  Contracts  differ from options in that they are  bilateral  agreements,
with both the  purchaser  and the  seller  equally  obligated  to  complete  the
transaction.  In addition,  Futures  Contracts call for  settlement  only on the
expiration date, and cannot be "exercised" at any other time during their term.

      





         The  purchase  or  sale  of  a Futures  Contract  also differs from the
purchase or sale of  a security or the purchase of an option in that no purchase
price  is  paid  or  received.   Instead,  an amount of cash or cash equivalent,
which varies but may be as low as 5% or less of the value of the contract,  must
be  deposited  with  the broker  as "initial margin." Subsequent payments to and
from the broker, referred to as "variation margin," are made on a daily basis as
the value of the index or instrument underlying the Futures Contract fluctuates,
making  positions  in  the  Futures  Contract more or less  valuable,  a process
known as "marking to the market."

         A Futures Contract may be purchased or sold only on an exchange,  known
as a "contract  market,"  designated by the Commodity Futures Trading Commission
for the  trading  of such  contract,  and  only  through  a  registered  futures
commission merchant which is a member of such contract market. A commission must
be paid on each completed  purchase and sale  transaction.  The contract  market
clearing house  guarantees the performance of each party to a Futures  Contract,
by in effect taking the opposite side of such Contract. At any time prior to the
expiration of a Futures  Contract,  a trader may elect to close out its position
by taking an opposite  position on the contract market on which the position was
entered into,  subject to the  availability  of a secondary  market,  which will
operate to terminate the initial position.  At that time, a final  determination
of variation  margin is made and any loss  experienced by the trader is required
to be paid to the  contract  market  clearing  house while any profit due to the
trader must be delivered to it.

         Interest  rate futures  contracts  currently are traded on a variety of
fixed income  securities,  including  long-term U.S.  Treasury  Bonds,  Treasury
Notes,   Government   National  Mortgage   Association   modified   pass-through
mortgage-backed  securities,  U.S.  Treasury Bills, bank certificates of deposit
and  commercial  paper.  In addition,  interest rate futures  contracts  include
contracts on indices of municipal securities. Foreign currency futures contracts
currently are traded on the British pound, Canadian dollar,  Japanese yen, Swiss
franc, German mark and on Eurodollar deposits.

Options on Futures Contracts

         An Option on a Futures  Contract  provides the holder with the right to
enter into a "long" position in the underlying Futures Contract,  in the case of
a call option, or a "short" position in the underlying Futures Contract,  in the
case of a put option,  at a fixed  exercise price to a stated  expiration  date.
Upon exercise of the option by the holder,  the contract  market  clearing house
establishes a corresponding  short position for the writer of the option, in the
case of a call option,  or a corresponding  long position,  in the case of a put
option. In the event that an option is exercised, the parties will be subject to
all the risks associated with the trading of Futures Contracts,  such as payment
of variation margin deposits. In addition,  the writer of an Option on a Futures
Contract,  unlike  the  holder,  is  subject to  initial  and  variation  margin
requirements on the option position.

         A position in an Option on a Futures  Contract may be terminated by the
purchaser or seller prior to expiration by effecting a closing  purchase or sale
transaction,  subject to the availability of a liquid secondary market, which is
the purchase or sale of an option of the same series  (i.e.,  the same  exercise
price and  expiration  date) as the option  previously  purchased  or sold.  The
difference between the premiums paid and received represents the trader's profit
or loss on the transaction.

         





         An option,  whether  based on a Futures  Contract,  a stock  index or a
security,  becomes worthless to the holder when it expires.  Upon exercise of an
option, the exchange or contract market clearing house assigns  exercise notices
on   a random  basis  to those of its members which have written  options of the
same series  and  with  the same  expiration  date. A brokerage  firm  receiving
such  notices then  assigns   them on a random  basis to those of its  customers
which  have   written  options  of  the  same  series  and  expiration  date.  A
writer   therefore   has  no  control  over  whether an option will be exercised
against it, nor over the time of such exercise.

The date of this Supplement is November 3, 1997.