A path-dependent option which is parameterized by a finite knock-in (knock-out) rate. The payoff at expiration is equal to that of an otherwise identical standard option (vanilla option) discounted by the trigger factor using the total time during the option’s life that the underlying was above or below a pre-determined barrier price. The strike price of the option is readjusted at predefined fixing dates, only if the spot price is better than that of the immediate previous fixing date.

This option comes in two types: step up option and step down option.