knock-out option

Knock-Out Option

An option with a built in mechanism to expire worthless should a specified price level be exceeded.

Notes:

An exotic option mainly used for commodities and currencies.

See also: Exchange Rate, Forex, Knock-in Option, Option, Vanilla Option

---

Knock-out option

An option that- is worthless at expiration if the underlying commodity or currency price reaches a specific price level.

---

knock-out option

An option that loses its entire value in the event the underlying asset crosses a predetermined price level.