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Knock-out option
A barrier option that expires worthless when the price of the underlying or other specified financial variable reaches a predetermined level (the outstrike) prior to maturity.
(1) The term kick-out option is used when the outstrike is in the money.
2) A down-and-out option expires when the price of the underlying asset or financial variable drops to the outstrike and an up-and-out option expires when the price of the underlying asset or financial variable increases to the outstrike.
Translations
Synonyms and variations
- Down-and-out option
- Kick-out option
- Out option
- Up-and-out option