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Barrier call option payoff diagram


Barrier call option payoff diagram


A barrier option can be a knock-out, meaning it can expire worthless if the underlying exceeds a certain price, limiting profits for the holder but limiting losses for the writer. It can also be a knock-in, meaning it has no value until the underlying reaches a certain price. If the stock Bareier below the strike price at expiration, the option expires worthless. Therefore, a call option has unlimited upside potential, but limited downside.Put Option PayoffA put option is the right, but not the obligation, to sell an asset at a prespecified price on, or before, a prespecified date in the future.

The payoff diagram of a put option looks like a mirror image of Barried call option (along the Y axis). If the stock is above the strike at This article does not cite any sources. Please help improve this article by adding citations to reliable sources. There are four basic types of barrier options that have slightly different payoff structures. These options can all be written as either puts or calls.




Barrier call option payoff diagram

Barrier call option payoff diagram

Barrier call option payoff diagram