8. You need to create three separate "spike payoffs" using butterfly spreads centered around various strike prices. This time we will only care about the payoffs, not the profits/losses.
The first butterfly spread uses strike prices of 10, 15 and 20. The second butterfly spread uses strike prices of 30, 35 and 40. The third uses strike prices of 50, 55 and 60. Use PUT options only.
Compute the PAYOFFS at expiration for the various terminal stock prices below for each butterfly spread.
Note: enter each butterfly spread payoff directly into one formula cell, for example: "=MAX(K1-ST,0)-(MAX(K2-ST,0))*2+MAX(K3-ST,0)" (with proper values for the K's and reference to where the ST cells are of course)
Plot only the Total Payoff as a function of ST. You should get 3 spikes next to one another. For this exercise, select the type of graph that uses straight lines.
		K = 10, 15, 20	K = 30, 35, 40	K = 50, 55, 60
ST	Total Payoff	First Butterfly Spread	Second Butterfly Spread	Third Butterfly Spread
0
1
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