Final answer:
Option (c) contract transactions settle on the next business day, known as T+1 settlement period.
Step-by-step explanation:
The question pertains to the settlement period for option contracts. For equity options in the United States, the standard settlement period is on the next business day following the transaction. This is known as T+1 (Transaction Day plus one day). Therefore, the correct answer to the question of when transactions involving an option contract settle is:
c. Next business day.