9 Why is so much attention given to the form of delivery of the underlying product on futures contracts when delivery hardly ever occurs?

At the close of the London Stock Exchange on 26 April 2004, the FTSE-100 index stood at 4571.8.

(a) Which of the options contracts on the FTSE-
100 index shown in Table 20.4 were then in-the-money? Why?

(b) Explain the difference between the cost of a call option and a put option at a strike price of 4825.