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A barrier option can be a knock-out, meaning it can expire worthless if the underlying exceeds a certain price, limiting profits for the holder but limiting losses for the writer. It can also be a knock-in, meaning it has no value until the underlying reaches a certain price. Barrier OptionA 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.
Please help improve this article by adding citations to reliable sources. For knock-outs, option writers want to push price to 1.20, but the buyer of the option wants to defend the level.But what happens if price gets to 1.20 - I mean what is the transaction in the spot market.
Information currency trading options barrier
