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  1. Nicole Seaman

    YouTube T3-42 - Exotic options: Barrier options

    The barrier option adds a barrier value (for example, H = $95.00) and it the option can either "knock-out" (ie, get knocked-out if the barrier is breached) or "knock-in" (ie, come into existence if the barrier is breached. If the barrier is below the asset price, it is either a down-and-out or...
  2. A

    Gap options versus barrier options.

    Hi guys Can someone please clarify the difference between a barrier options and a gap option exactly? A gap is an option that gets exercised at 1 strike but its payoff is based on another strike. This sounds very similar to a barrier option which becomes activated on 1 barrier but its payoff...
  3. Nicole Seaman

    P1.T3.730. Chooser and barrier (exotic) options (Chapter 26 cont.)

    Learning objectives: Identify and describe the characteristics and pay-off structure of the following exotic options: gap, forward start, compound, chooser, barrier, binary, lookback, shout, Asian, exchange, rainbow, and basket Questions: 730.1 A non-dividend paying stock is currently...
  4. L

    Barrier Option

    Hi David, Would you kindly answer my following question? Which of the following option strategies can give the buyer an unlimited profit? a. An American digital option b. A European lookback call option c. A European butterfly spread d. An up-and-out with rebate barrier option The answer is B...