Problem
The S&P/ASX200 market index is currently 6800. You predict that the market will rise substantially in coming weeks and are prepared to speculate on this prediction.
You enter 30 long call options written on the S&P/ASX200 index. The options have a strike price of 7100.
On the expiry date of these options, the S&P/ASX200 index sits at 7050.
What is the gross payoff (in dollars) on your index option speculation?