BARRIER OPTION
\bˈaɹɪəɹ ˈɒpʃən], \bˈaɹɪəɹ ˈɒpʃən], \b_ˈa_ɹ_ɪ__ə_ɹ ˈɒ_p_ʃ_ə_n]\
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A COMPLEX DERIVATIVE contract that creates or extinguishes an underlying EUROPEAN OPTION as the price of the market reference moves through a specified BARRIER. Four versions of the barrier option are commonly used, including the DOWN AND IN OPTION, DOWN AND OUT OPTION, UP AND IN OPTION, and UP AND OUT OPTION. The fact that the underlying option may be extinguished, or may never be created, means that a barrier option is typically less expensive than an otherwise equivalent European option. Also known as KNOCKIN OPTION, KNOCKOUT OPTION. See also REVERSE BARRIER OPTION.
By Henry Campbell Black
Word of the day
Proto Oncogene Proteins c erbB 2
- cell surface protein-tyrosine kinase that is found to be overexpressed in significant number adenocarcinomas. It has extensive homology can heterodimerize EGF EPIDERMAL GROWTH FACTOR), 3 receptor (RECEPTOR, 3) and the 4 receptor. Activation of erbB-2 receptor occurs during heterodimer formation with a ligand-bound erbB family members. EC 2.7.11.-.