PAT - The Payoff Advantage Tool
Asymmetric Power Options

Currency 1: Asymmetric Power Call 2 on Currency 2 and Asymmetric Power Put 1 on Currency 3

Formula: H1 = max (X1- S12^(-T), 0) + max (X2 - S13^T, 0);

T = 0...2

Currency 2: Unidentified. Asset 3: Unidentified.

Here is a demonstration that there are no limits to the level of complexity that PAT can handle – financially equivalent payoffs are always produced easily. Each of the three payoffs can be a simple option, or it can be an entire portfolio consisting of a multitude of various financial instruments with dozens of differently shaped payoffs. PAT, working at the level of the symmetry underlying all of the currencies, identifies financially equivalent payoffs instantly.

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