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Knock-In Option

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Knock-In Option

What Does Knock-In Option Mean?

A latent option contract that begins to function as a normal option (“knocks in”) only after a certain price level is reached before expiration.

Investopedia explains Knock-In Option

Technically, this type of contract is not an option until a certain price is met, and so if the price is never reached, it is as if the contract never existed. Knock-ins are a type of barrier option that may be either a down-and-in option or an up-and-in option.

Related Terms:
Derivative
Expiration Date
Plain Vanilla
Stock Option
Triple Witching



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