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Discrete Barrier Option


A barrier option in which the barrier level is only monitored discretely at specific dates, rather than continuously. In practice, the barrier level is monitored almost only at discrete points in time with an exception of currency options, where the barrier is so frequently monitored. The barrier, for interest rate options, commodity options, and equity options, is typically monitored against an official daily closing price.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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