Double Barrier Option
An option with two distinct triggers that define the allowable range for the price fluctuation of the underlying asset. In order for the investor to receive a payout, one of two situations must occur; the price must reach the range limits (for a knock-in) or the price must avoid touching either limit (for a knock-out). Investopedia Says:
A double barrier option is a combination of two dependent knock-in or knock-out options. If one of the barriers are reached in a double knock-out option, the option is killed. If one of the barriers are reached in a double knock-in option, the option comes alive. Related Terms:
Barrier Option
Exotic Option
Knock-In Option
Knock-Out Option |