An exotic option which offers a guaranteed payout if the underlying breaks through a preset price/rate at a specific point in time, irrespective of future direction. For example, if a lock-step option has a trigger level on a particular benchmark index of 1000, this implies that the owner has a guaranteed minimum payout fixed at that level, regardless of the option’s moneyness at expiration.

This type of option is usually added to equity-linked notes in order to increase their appeal in the sight of investors.

This option is alternatively known as a step-lock option.