Barrier Options : Black & Scholes model
Barrier option are options where the payoff depends on whether the underlying
asset's price reaches a certain level
during a certain period of time.
They are attractive to some market participants because they are less expensive
the corresponding regular options.
These barrier options can be classified as either knock-out options and knock-in
Knock-out option : the option ceases to exist when the underlying asset price
reaches a certain barrier.
Knock-in option : the option comes into
existence only when the underlying asset price reaches a barrier.
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