PAT - The Payoff Advantage Tool
Square Root-Shaped Payoff

Asset 1: Square Root function.

Formula: H1 = SQRT(S12)

Asset 2: Square Root function.

This, although not an actual payoff, is one of the very few cases when the payoffs on the opposite sides of the market are identical. This example is included to illustrate that payoffs on the opposite sides of the market very rarely look the same.

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