A barrier option which has one trigger price (barrier) that may be either above or below its strike price. Investors usually hold single barrier options when they have a specific view about the course of a particular underlying over the lifetime of the option. Single barrier options that have a barrier above spot price (of the underlying) are classified as up-and-out options or up-and-in options. Likewise, single barrier options in which the barrier is below spot price are known as down-and-out options and down-and-in options.
August 20, 2024
