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Down-and-In Barrier Option


A variant of a barrier option in which the right to exercise activates or becomes active if the actual “spot price” of the underlying turns out to be below the specified barrier. With this option, the spot price of the underlying is set above that barrier. Therefore, having the ability to exercise the option depends on the price of the underlying closing below the barrier level. If the underlying price does not break through the barrier level, the option expires worthless.

It is also known as a down-and-in option.



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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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