Barrier options are typically classified as either knock-out or knock-in. Knock-in options are a type of barrier option that may be either down-and-in option or an up-and-in option. A call option gives its buyer the option to put call option contracts knockout an agreed quantity of a commodity or financial instrument, called the underlying asset, from out seller of the option by a certain date (the expiry), for a certain price (the pht price).
A put option gives its buyer the right to sell the underlying asset at an agreed-upon strike price before the expiry date.The party that sells the option is called the writer of the option. The option holder cohtracts the option writer a fee — called the option price or premium. In exchange for this fee, the option writer is obligated to fulfill the terms of the contract, should the option holder choose to exercise the optiThis article does not cite any sources.
Please help improve this article by adding citations to reliable sources. The OTC market is a complicated one, where traders from large institutions knnockout create and trade non-standard option derivatives. They can, for example, add their own special rules such as: if the underlying stock trades as high as x then the contract terminates and the option is then worthless. This is known as a Knockout Option or a Barrier Up and Out Option.Options are listed and standardized by the stock exchange and are traded calo what is known as Serial Months.
By standardized, I mean that the specifications that make up the opt.