An option with a payoff that depends on whether the underlying investment trades through a barrier price. If the option doesn’t reach a certain price level, it is worthless. There are many types of barrier options. Three types are: down-and-out options, up-and-in options, and early-exercise trigger CAPS options. Barrier options are one type of trading strategy that an options trader will use to create profits. Also called knock-in or knockout options.
barrier option - Investment & Finance Definition
Webster's New World Finance and Investment Dictionary Copyright © 2010 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.
Used by arrangement with John Wiley & Sons, Inc.
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"Barrier option." YourDictionary. LoveToKnow. www.yourdictionary.com/barrier-option.
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Barrier option. (n.d.). In YourDictionary. Retrieved from https://www.yourdictionary.com/barrier-option
