Final Answer:
At expiration, all in-the-money S&P Index calls are settled by the delivery of a) cash.
Step-by-step explanation:
In options trading, the settlement of in-the-money S&P Index calls involves the delivery of cash.
This means that if an investor holds a call option on the S&P Index that is in the money at expiration, the settlement will be in the form of cash rather than the physical delivery of assets.
Options contracts are financial derivatives that provide the holder with the right, but not the obligation, to buy or sell an underlying asset at a predetermined price (strike price) before or at the expiration date.
In the case of S&P Index calls, being in the money means the index's current value is higher than the strike price, resulting in a profit for the option holder.
The settlement in cash simplifies the process, allowing investors to receive the monetary value of their profitable options positions without the need for the physical transfer of stocks or other assets.
This cash settlement mechanism is a standard practice in financial markets, providing liquidity and efficiency in the options trading process.
In summary, the correct answer is a) cash, as in-the-money S&P Index calls are settled by the delivery of cash at expiration.