strangle: Strangle Spread
In FinancialMath: Financial Mathematics for Actuaries

Gives a table and graphical representation of the payoff and profit of a long strangle spread for a range of future stock prices.

1	strangle(S,K1,K2,r,t,price1,price2,plot=FALSE)

`S`	spot price at time 0
`K1`	strike price of the long put
`K2`	strike price of the long call
`r`	continuously compounded yearly risk free rate
`t`	time of expiration (in years)
`price1`	price of the long put with strike price K1
`price2`	price of the long call with strike price K2
`plot`	tells whether or not to plot the payoff and profit

Stock price at time t =S_t

For S_t<=K1: payoff =K1-S_t

For K1<S_t<K2: payoff =0

For S_t>=K2: payoff =S_t-K2

profit = payoff - (price1 + price2)*e^{r*t}

A list of two components.

`Payoff`	A data frame of different payoffs and profits for given stock prices.
`Premiums`	A matrix of the premiums for the call and put options, and the net cost.

K1 < S < K2 must be true.

Kameron Penn and Jack Schmidt