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Barrier options
(redirected from Barrier option)

   Also found in: Wikipedia 0.02 sec.
Barrier options
Option contracts that remain dormant until a trigger point (the barrier price) is reached, at which point the call or put option is activated, and results either in a long or short options position, or in the automatic exercise of an options position. One example is an up-and-in call. Assume an exercise price of $50 and a barrier price of $53. If the stock stays below $53, the call option cannot be exercised. If the stock price reaches the $53 barrier price, the holder then has a call option on the shares at $50. These are exotic options.


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Container size, shelf-life requirements, and other performance needs are so diverse that no one barrier option fits the bill across the board.
A wide range of topics are covered, including valuation methods on stocks paying discrete dividend, Asian options, American barrier options, Complex barrier options, reset options, and electricity derivatives.
Pricing exotic options: a quantitative look at the path-dependent single barrier option by YieldCurve.
 
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