The S&P/ASX200 market index is currently 6800. You predict that the market will fall substantially in coming weeks and are prepared to speculate on this prediction.

You enter 40 long put options written on the S&P/ASX200 index. The options have a strike price of 6450.

On the expiry date of these options, the S&P/ASX200 index sits at 6500.

What is the gross payoff (in dollars) on your index option speculation?

Note that S&P/ASX200 index

options have a standard multiplier of $A10.  Do