Barrier option (or knock-in option) that causes a plain-vanilla call or put option to come into existence if the underlying asset price falls to a predetermined price level (the barrier price).
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An option that is created when the value of the underlying asset falls to a predetermined level. Compare down-and-out option.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.