Down-and-In Option
A form of a knock-in option whose payoff is determined by the price of the underlying asset sinking to the barrier price level. Investopedia Says:
If the underlying asset does reach the barrier price level, the down-and-in option becomes a vanilla European call or put option. If the underlying asset price does not reach the barrier level, the option expires worthless. Investors may choose a down-and-in option rather than directly purchasing the vanilla option, as option premiums tend to be significantly lower for knock-in options. Related Terms:
Barrier Option
Down-and-Out Option
European Option
Exotic Option
Knock-in Option
Option
Vanilla Option |