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RKO Option


It stands for reverse knock-out option; a knock-out option in which the barrier is triggered when the option gets in the money (ITM). The barrier level knocking the option out would be above spot underlying price for a call (call reverse knock-out– call RKO) and below it for a put (put reverse knock-out– put RKO).

If the barrier is not broken through the knockout event does not take place and the option turns into a standard 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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