At expiration, the writer of a stock index call option that was written at the money will be required to:
A) deliver the underlying stocks in the index if the index value moves up.
B) deliver the underlying stocks in the index if the index value moves down.
C) deliver a cash value if the index value moves up.
D) deliver a cash value if the index value moves down.

Question

Quizplus · Accepted Answer

At expiration, if the index value moves up, the call option will be in-the-money, and the writer will have to settle the difference in cash, as stock index options are typically cash-settled.

At Expiration, the Writer of a Stock Index Call Option