The specified interest rate, or any underlying price, that activates (knocks in) or deactivates (knocks out) a barrier option. The barrier price which if touched or breached a barrier option activates is known as an instrike. Also, the barrier price which if touched or breached a barrier option deactivates is called an outstrike. In certain markets, barrier options come into life once the barrier price is touched during a trading day within time to expiration. In others, the barrier price is required to be touched or breached several times.
November 13, 2023