Domestic Payoff: Strangle Formula: Hd = max (Sd - Xd1, 0) + max (Xd2 - Sd, 0) Xd1 = 0.8; Xd2 = 1.5

Foreign Payoff: unidentified

The simple two-option spreads' financially equivalent foreign counterparts are not always easily identifiable, as this diagram illustrates. With Butterfly Spreads and Straddles, the similarity of the domestic and foreign payoffs was obvious. Not so with Strangles, another case of a simple two-option spread.