A accumulator option with an American-style knock-out barrier. If the underlying trades through that barrier on a fixing date, the accumulator subtracts from the notional a specific amount (a proportion of the forward notional is deducted from the amount that could have otherwise been bought or sold under the ordinary forward contract). Each time the underlying hits the barrier on a fixing date, the notional decreases. On expiration date, the terminal notional becomes:
Notional + notional x (n/N)
where:
n is the number of times the underlying breaks through the barrier on the preset fixing dates.
N is the number of fixing dates over the life of the option.
The opposite structure of an accumulator-out option is an accumulator-in option.
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