Asset 1: Strangle Formula: H1 = max (S12 - X1, 0) + max (X2 - S12, 0) X1 = 0.8; X2 = 1.4

Asset 2: unidentified

The simple two-option spreads — financially equivalent counterparts are not always easily identifiable, as this diagram illustrates. With Butterfly Spreads and Straddles, the payoffs for Asset 1 and Asset 2 were obviously similar. Not so with Strangles, another case of a simple two-option spread.