The Cboe S&P 500 Index Options - SPX are peculiar in that there is no underlying stock or ETF - they trade the index. I want to make sure that I understand the pricing.
On the link above the following sentence can be read:
Large Notional Size -- around $200,000 per Contract with the SPX index at 2000 (10 times that of SPDR options).
Say the S&P 500 is at $2,668.$ Would then a contract have a notional (?) value of $\$266,800$?
Now say that I want to buy a single call option with a strike of $2,710$ expiring May 9, 2018 - it's for illustration only, but the contract does exist: SPXW180509C02710000.
The last trading price is very recent, and at $0.65.$ Assuming that there is no price further price movement, and leaving aside ask/bid differences.
How would I go about calculating the price of $1$ contract?
And assume that the index climbs to $2,800$ (to make things easy) by the expiration date. Evidently I would exercise my option to buy at the strike price of $2,710.$
But what would be the final calculus of the gain minus the purchase price?