Omar – The Junior Trader at Gulf Investment Group

Omar, a Junior Trader, is analyzing the derivatives market for large-cap tech stocks and is focused on setting up a bearish (decline-anticipating) position on Microsoft Corporation (MSFT). He is reviewing the current exchange-listed options quotes for his final training assessment.

Assumptions:

1. Each option contract represents 100 shares of the underlying stock.

2. Transaction costs and bid-ask spreads are ignored for simplification.

Question:

As part of a directional strategy anticipating a decline in Microsoft's stock price, how much total capital would Omar need to allocate to purchase 4 put option contract at the quoted strike price?