Barrier option

A barrier option is one which is either activated, or cancelled, if the price of the underlying asset goes above or below a pre-determined level, at any time during the life of the option.

The benefit of barrier options - for the buyer of the option - is a lower premium, compared with a comparable standard option.

See also

• Asian option
• Call option
• European-style option
• Exotic option
• Put option
• Underlying asset