Down-and-In Option

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.

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.


Investment dictionary. . 2012.

Игры ⚽ Поможем написать курсовую

Look at other dictionaries:

  • Down-and-Out Option — A type of knock out barrier option that ceases to exist when the price of the underlying security hits a specific barrier price level. If the price of the underlying does not reach the barrier level, the investor has the right to exercise their… …   Investment dictionary

  • down-and-in option — barrier option (or knock in option) that causes a plain vanilla call or put option to come into existence if the underlying asset price falls to a predetermined price level (the barrier price). Bloomberg Financial Dictionary …   Financial and business terms

  • down-and-out option — barrier option (or knock out option) that initially is a plain vanilla option, but which ceases to exist if the underlying security falls to a predetermined level (the barrier price). Bloomberg Financial Dictionary …   Financial and business terms

  • Down-and-in option — Barrier option that comes into existence if asset price hits a barrier. The New York Times Financial Glossary …   Financial and business terms

  • Down-and-out option — Barrier option that expires if asset price hits a barrier. The New York Times Financial Glossary …   Financial and business terms

  • Down and out — may refer to: In film and television: Down and Out in Paris and London, a 1933 semi autobiographical book by George Orwell Down and Out in Beverly Hills, a 1986 American comedy film Down and Out in America, a 1986 documentary film on poverty in… …   Wikipedia

  • Down and out (disambiguation) — Down and Out is a passing play in American football where the quarterback passes to a pre arranged wide receiver.Down and Out may also refer to:In film and television: * Down and Out in Paris and London , a 1933 semi autobiographical book by… …   Wikipedia

  • Down and out (football) — For other uses, see Down and out (disambiguation). Down and Out is a passing play in American football where the quarterback passes to a pre arranged wide receiver. The quarterback calls down and out (and to right or left ) in the huddle. It s… …   Wikipedia

  • Down and In —    A trigger option that is activated when the price of the underlying instrument falls to a predetermined level. A type of barrier option.    ► See also Option …   Financial and business terms

  • Down and Out —    A knockout option that is cancelled when the price of the underlying instrument falls below a predetermined level. A type of barrier option.    ► See also Option …   Financial and business terms

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”