Islamic Finance
Ba’i al-Sifah
August 31, 2021
Derivatives
HR
September 1, 2021

A barrier warrant that knock in (activates) or knocks out if the underlying (security, index, etc.) hits or passes through the barrier. For example, in the case of a knock-out warrant, once the barrier is hit, the warrant will expire worthless prematurely.

Activation or deactivation might be based on one time hit, or the occurrence of a number of hits over the warrant’s life.

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