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Derivatives

  Derivatives   |   Terms
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  • January 5, 2021
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Knock-Out Corridor Option

A variation of corridor option. In this structure, the holder will no more accrue coupon interest as soon as the underlying rate breaks out of the accrual range. The corridor option knocks out and is not reactivated even if the underlying rate returns to the range. In other words, once the underlying leaves the range, the holder loses the ability to accrue interest and at the same time loses the option altogether.


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