A knock-in option (KI option)- a barrier option-that becomes in the money once the defined barrier is hit and breached (where the option activates). The barrier is in-the-money with regard to the strike price when the option is exercised. The barrier is above of the strike price for a call option (a reverse knock-in call) and below the strike for a put option (a reverse knock-in put).

If the barrier is not broken through the knock-in event does not take place and the option turns into a standard option.