A combination of barrier events (in relation to a barrier option, specifically a double barrier option) that takes place in the following sequence: 1) a knock-out (KO) event and 2) another knock-out (KO) event. The two knock-out barriers are set at two different price/ rate levels.

If the underlying price or rate crosses the first knock-out barrier (KO barrier), the option (KOKO option) ceases to exist (deactivates or terminates automatically). If not, it continues “activated” until the second knock-barrier is crossed, then it deactivates.