Knock-out barrier


Knock-out barriers, knock-out levels or knock-out thresholds are found with knock-out options. These are options that expire when defined barriers have been breached.


Knock-out products


As with warrants, knock-out products also offer disproportionately high participation in rising (call) and falling (put) prices of an underlying. Knock-out products track the performance of the underlying on a 1:1 basis. This largely eliminates the influence of volatility. Breach of the knock-out barrier normally results in total loss of the invested capital.

 

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