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	Forex Exotic Currency Options Glossary Fx Options Dictionary Foreign Exchange Options
		Barrier Options - These are options that have an embedded price level, (barrier), which if reached will either create a vanilla option or eliminate the existance of a vanilla option.
		This type of option is generally quite expensive because of the flexibility afforded to the buyer.
		The down and in option is the same as the up and in, except the currency has to reach a lower barrier.
	www.forexdirectory.net /exover.html (1292 words)

	Barrier option - Wikipedia, the free encyclopedia
		A barrier option is a type of financial option where the option to exercise depends on the underlying crossing or reaching a given barrier level.
		Barrier options were created as a way to provide the insurance value of an option without charging as much premium.
		Barrier options are sometimes accompanied by a rebate, which is a payoff to the option holder in case of a barrier event.
	en.wikipedia.org /wiki/Barrier_option (731 words)

	Encyclopedia article: Barrier option (Site not responding. Last check: 2007-09-16)
		A barrier option is a type of financial option (The right to buy or sell property at an agreed price; the right is purchased and if it is not exercised by a stated date the money is forfeited) where the option to exercise depends on the underlying crossing or reaching a given barrier level.
		Barrier options were created as a way to provide the insurance value of an option (The right to buy or sell property at an agreed price; the right is purchased and if it is not exercised by a stated date the money is forfeited) without charging as much premium.
		Barrier options can have either american (A native or inhabitant of the United States) or european (A native or inhabitant of Europe) exercise style.
	www.absoluteastronomy.com /encyclopedia/b/ba/barrier_option.htm (677 words)

	Barrier Option, Knock-In Option, Knockout Option
		If the option expired with the underlier at EUR 103, but the underlier never reached the barrier level of EUR 110 during the life of the option, the option would expire worthless.
		Because barrier options are path-dependent, it is desirable to model a term structure of implied volatilities.
		Asian option An option whose expiration value depends on the average value of an underlier over a specified period.
	www.riskglossary.com /articles/barrier_option.htm (532 words)

	TheManageMentor - Finance - Exotic Options: An Overview
		A barrier option, alternatively known as a trigger or a knock-in/knock-out option, is an option that serves as conditional insurance.
		Look-back options are path dependent options, where the payoff is a function of the highest or lowest price at which the underlying asset trades during the lifetime of the option.
		Therefore, the ladder option is just a variation of the look-back option apart from the fact that the look-back mechanism is effective only for a set of predetermined levels achieved by the underlying asset.
	www.themanagementor.com /EnlightenmentorAreas/finance/IF/exotic_options.htm (943 words)

	Exotic Options (Site not responding. Last check: 2007-09-16)
		The closer the knock-out barrier is to the current market level the cheaper is the knock-out barrier option.
		However consider the same option but now with a knock-out barrier level of 1.82, the value of this option will be significantly less then of the plain vanilla option due to the probability of spot 1.82 being reached.
		Lookback options give the buyer the right to, in the case of a lookback call, buy the underlying asset at the lowest price reached during the term of the option while a lookback put gives the right to sell at the highest price reached through the duration of the option.
	www.macroanalytics.com /html/exotic_options.html (542 words)

	Option Pricing & Stock Price Probability Calculators by Peter Hoadley
		Barrier option calculator using trinomial lattice: Calculates barrier option prices, and hedge parameters, using a trinomial lattice, and displays the tree structure used in the calculation.
		Note that these barrier nodes will normally be horizontal, except when there is a discrete dividend payment during the life of the option, in which case there may be a step effect as the tree is adjusted to take account of the changed underlying asset price following the ex-dividend date.
		For example if the barrier is very close to the underlying asset price the number of steps required to align the nodes becomes prohibitively large; if there are discrete dividend payments which cause the nodes in the tree to move then this adjustment is not effective.
	hoadley.net /options/calculators.htm (2622 words)

	Ratchet Option, Cliquet Option
		A forward start option is an advance purchase of a put or call option that will become active at some specified future time.
		The effect of the entire instrument is of an option that periodically "locks in" profits in a manner somewhat analogues to a mechanical ratchet.
		barrier option A path-dependent option that terminates or is activated by the underlier reaching some "barrier" level.
	www.riskglossary.com /articles/forward_start_option.htm (359 words)

	barrier option
		Most barrier options (or knock-out options) begin their life looking like a standard option, but if the underlying asset price ever hits or pierces some predefined barrier price, the option disappears and pays off nothing regardless of what happens next.
		These are examples of what are termed “path-dependent” options since the payoff of the option not only depends (as usual) on the price of the underlying asset at expiration but also on its earlier prices (its price path history).
		A second kind of barrier option, a knock-in option, starts its life as nothing and ends its life as nothing unless the underlying asset price hits or pierces some predefined barrier price.
	www.in-the-money.com /glossary/barrier_.htm (190 words)

	About Barrier Options (Site not responding. Last check: 2007-09-16)
		Barrier options are similar to standard options except that they are extinguished or activated when the underlying asset price reaches a predetermined barrier or boundary price.
		Barrier options are path-dependent since they are dependent on the price movement of the underlying asset.
		Barrier options are hybrids: they are European in that they could have a payoff at expiration but they are American in that they may exercised (extinguished) prior to expiration.
	www.fintools.com /doc/exotics/exoticsAbout_Barrier_Options.html (581 words)

	barrier island - Hutchinson encyclopedia article about barrier island (Site not responding. Last check: 2007-09-16)
		Most barrier islands are derived from marine sands piled up by shallow longshore currents that sweep sand parallel to the seashore.
		The Frisian Islands are barrier islands along the coast of the Netherlands.
		This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional.
	encyclopedia.farlex.com /barrier+island (161 words)

	Global Derivatives Barrier Options
		Barrier options are path-dependent options which come in many flavours and forms, but their key characteristic is that these types of options are either initiated or exterminated upon reaching a certain barrier level; that is, they are either knocked in or knocked out.
		Since barrier options were traded on the OTC in the late 60s they have been used extensively to manage risks related to commodities, FX and interest rate exposures.
		For American style barrier options which have no closed form solutions Haug (2000) illustrates the use of analytical solution in which the reflection principle is called upon, and American barrier options are valued based on their relation to plain vanilla options.
	www.global-derivatives.com /options/barrier-options.php (2878 words)

	[No title]
		For barrier and digital/binary options, it can be useful to include the spot rate at the time the option was executed to make it easier to know whether the option needs to move "up" or "down" to be triggered.
		Periodically, an average rate option agreement will be struck whereby some rates have already been observed in the past but will become part of computation of the average rate of the option.
		A type that is used within the FX barrier option definition to define one or more barrier levels that determine whether the option will be knocked-in or knocked-out.
	www.w3.org /XML/Binary/2005/03/test-data/FPML-4.0/fpml-fx-4-0.xsd (2954 words)

	Exotic Options in Finance KIT: A Host of Possibilities - Finance onLine - Volume 7 n3 (Site not responding. Last check: 2007-09-16)
		If the trigger price is touched at any time before maturity, it causes an option with pre-determined characteristics to come into existence (in the case of a knock-in option) or it will cause an existing option to cease to exist (in the case of a knock-out option).
		For example, it is possible to have an American option with barriers and a non-vanilla pay-off function on the average rate.
		Unlike vanilla options, where the most practical way of calculating market value and risk is widely agreed upon, the potentially complex structures of exotic options mean that it is not possible to have one single formula that satisfies everyone.
	www.trema.com /finance_online/7/3/FK_ExoticOptions.html?7 (1130 words)

	[No title] (Site not responding. Last check: 2007-09-16)
		Barrier Options are options whose payout is dependent on some predefined price during the life of the option.
		A one click option is one in which barrier is a price on one particular day and can be used for hedging against the movement in the underlying asset on one particular date.
		A one-rung option is one in which the barrier is a predetermined level of the underlying asset.
	www.sbm.temple.edu /~brader/exotic.htm (957 words)

	Double Barrier Options
		Once either of these barriers is breached, the status of the option is immediately determined: either the option comes into existence if the barrier is an “in” or “knock in” barrier, or ceases to exist if the barrier is an “out” or “knock out” barrier.
		Double barrier options of many types exist and it is best to try to understand these options by considering several key features.
		In this case, if both the upper and lower barriers are breached during the life of the option, the holder is knocked-in to a call or put option.
	www.fincad.com /support/developerFunc/mathref/DblBar.htm (1359 words)

	Down-and-Out Option
		A type of knock-out barrier option that ceases to exist when the price of the underlying security hits a specific barrier price level.
		If the price of the underlying does not reach the barrier level, the investor has the right to exercise their European call or put option at the exercise price specified in the contract.
		At the option's inception the price of the stock was 95 but before the option was exercisable the price of the stock hit 80, this means the option automatically expires worthless even if the underlying hits 100 before the exercise date.
	baystreet.investopedia.com /terms/d/daoo.asp (140 words)

	Down-and-In Option
		A form of a knock-in option whose payoff is determined by the price of the underlying asset sinking to the barrier price level.
		Investors may choose a down-and-in option rather than directly purchasing the vanilla option, as option premiums tend to be significantly lower for knock-in options.
		Options Basics Tutorial - An introduction to the world of options, covering everything from primary concepts to how options work and why you might use them.
	baystreet.investopedia.com /terms/d/daio.asp (109 words)

	Types of Options
		The buyer of the collar purchases the cap option to limit the maximum interest rate he will pay and sells the floor option to obtain a premium to pay for the cap.
		With knockouts, the buyer begins with a vanilla option, however, if the predetermined price barrier is hit, the vanilla option is cancelled and the seller has no further obligation.
		The contract gives the buyer the option to execute an interest rate swap on a future date, thereby locking in financing costs at a specified fixed rate of interest.
	www.sp.uconn.edu /~jstiver/Eco230/options.htm (1926 words)

	Introduction to Exotic Options
		Intuitively, barrier options should be cheaper than their plain vanilla counterparts because they risk either not being knocked in or being knocked out.
		A knock-in option in which the barrier is in-the-money with respect to the strike is called a reverse knockin option.
		The payoff of average rate options is calculated by taking the difference between the average for a pre-set index over the life of the option and the strike price and then multiplying this difference by the notional amount.
	www.finpipe.com /exoptions.htm (1566 words)

	TradersGame.com Glossary
		Compound options are sometimes known as "split fee" options because two payments are involved: an up-front premium and, if exercised, the amount of the strike price, which is the premium for the back option.
		An equivalent position for one option is calculated by multiplying the delta for the option by the trade quantity of the option.
		A call buyer, if he exercises his option, is, in effect, demanding delivery of the quantity of the underlying instrument previously specified as the option quantity, and must, of course, be prepared to pay for it.
	tradersgame.com /glossary.html (4869 words)

	Exotic option - Wikipedia, the free encyclopedia
		In finance, an exotic option is a derivative which has features making it more complex than commonly traded products (vanilla options).
		It could involved foreign exchange rates in various ways, such as a quanto or composite option.
		Even products traded actively in the market can have the characteristics of exotic options, such as convertible bonds, whose valuation can depend on the price and volatility of the underlying equity, the credit rating, the level and volatility of interest rates, and the correlations between these factors.
	en.wikipedia.org /wiki/Exotic_option (202 words)

	Robert Haramoto's double barrier option calculator
		He solves for the probability of not hitting either barrier, of hitting the upper barrier before hitting the lower barrier, and of hitting the lower barrier before hitting the upper barrier.
		Since the double knock-in option requires numerical integration from 0 to maturity, the recommended minimum number of terms needed is about 1,000.
		Inputs: The maturity is in years, the volatility is in decimal (20% = 0.20), the risk free rate and the dividend yield is quoated as in a semi-annual 30/360 convention (decimal).
	hometown.aol.com /rharamoto/java/b2/b2.html (434 words)

	Robert Haramoto's double barrier option calculator
		He solves for the probability of not hitting either barrier, of hitting the upper barrier before hitting the lower barrier, and of hitting the lower barrier before hitting the upper barrier.
		Since the double knock-in option requires numerical integration from 0 to maturity, the recommended minimum number of terms needed is about 1,000.
		Inputs: The maturity is in years, the volatility is in decimal (20% = 0.20), the risk free rate and the dividend yield is quoated as in a semi-annual 30/360 convention (decimal).
	members.aol.com /rharamoto/java/b2/b2.html (434 words)

	Komerční banka Bratislava - FX Barrier option
		Knock in options are options that behave in the same manner as currency (call/put) options, if they are activated during their life.
		Knock out options are options that behave in the same manner as currency (purchase or sales) options, if they are not de-activated during their life (then they cease to exist).
		The Barrier is an exchange rate level which causes the option's effectiveness (activation) to cease (de-activation).
	www.koba.sk /en/seg/seg6/products/fx_barrier_option.shtml (452 words)

	Food Product Design: Exploring the High-Barrier Option
		Even snack producers, like Keebler, are using barrier films to maintain the freshness of their products through long distribution chains.
		Although presently expanding, barrier containers have had a slow introduction to the market.
		As its barrier properties increase, its workability tends to decrease.
	www.foodproductdesign.com /archive/1991/0891PK.html (1340 words)

	[No title]
		As an example of the calculations possible with Option Tutor, we have developed this JAVA Barrier Option calculator.
		It uses the same analytic code as Option Tutor, and is based on a trinomial lattice.
		Especially for barrier options, it is important that this be a good estimate.
	www.ftsweb.com /options/opbarr.htm (256 words)

	One-Touch Double Barrier Binary Option Values (ResearchIndex) (Site not responding. Last check: 2007-09-16)
		This option can be considered as an American binary option with a knock-out barrier.
		Single-barrier European option and binary option formulae are published by Rubinstein and Reiner (1991a, 1991b).
		Since the one-touch double barrier options are not combinations of these options, in the following section we develop their valuation formulae in a Black Scholes environment.
	citeseer.ist.psu.edu /298434.html (247 words)

	[No title] (Site not responding. Last check: 2007-09-16)
		These options are non standard in the sense that one or several of the usually standardized options contractual stipulations are replaced with conditions that are tailored to suit the buyer and seller specific needs.
		As a seller, you may enhance your income by shorting a barrier option that pays off on scenarios that you think are improbable.
		If the barrier is crossed the put is out and the firm feels that its risk exposure to the JY depreciating is negligible.
	www.cba.uh.edu /ramon/7350/9.1Exoticoptions.ppt (926 words)

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