A path dependent option whose pay-off pattern depends not only on the path that the price of the underlying asset follows during the life of the option, but also on whether or not the underlying assets breaks a predetermined price level at any time during the life of the option.
A type of option where the payout depends on whether or not the underlying asset reaches a predetermined price.
An Option which will either become effective or cease to exist if the underlying instrument trades at some predetermined price prior to expiration. Common names for barrier Options include "down-and-out" and "up-and-over" Options, and "knock-out" and "kick-in" Options.
A conventional option which cannot be exercised above or below a specified price. If the price of the underlying security moved outside this specified price range during the life of the option, the option cannot be exercised.
a derivative contract that is activated or extinguished when the price of the underlying asset crosses a certain level
an option contract which includes trigger points - price levels - which when breached result in the buying or selling of other options
barrier options are exotic options that either come to life (are ‘knocked-inâ€(tm)) or are extinguished (‘knocked-outâ€(tm)) under conditions stipulated in the option contract. The conditions are usually defined in terms of a price level (barrier, knock- out or knock-in price) that may be reached at any time during the lifetime of the option. There are four major types of barrier options: up-and-out, up-and-in, down-and-out and down- and-in. The extinguishing or activating features of these options mean they are usually cheaper than ordinary options, making them attractive to buyers looking to avoid high premiums.
An option which is activated or deactivated once the underlying reaches a set level, known as the barrier. Can be categorised into trigger options: Down and In, Up and In; and knockout options: Down and Out, Up and Out.
A path dependent option that terminates or is activated by the underlier reaching some "barrier" level.
An option that is unable to be exercised above or below a specified price.
An option that is initiated or terminated if the underlying asset's value exceeds or goes below a reference price threshold.
A type of path-dependent option.
A family of path dependent options whose pay-off pattern and survival to the expiration date depend not only on the final price of the underlying currency but also on whether or not the underlying currency breaks a predetermined price level at any time during the life of the option. See Down and Out call/put, Down and in call/put, Up and out call/put, Up and in call/put.
A barrier option is a type of financial option where the option to exercise depends on the underlying crossing or reaching a given barrier level.