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Multi-Period Barrier Option


A barrier option which includes a series of individual non-contingent partial barriers. In this option, the knock-out barrier is in effect for the whole period and the knock-in trigger is only effective for a certain period. The individual barriers are non-contingent, that is, if in the first period the option is knocked out, it does not have to knock out in the other period(s). The barriers can be set over up to several different time periods (say 10, 15, etc), depending on the desired degree of flexibility. Each period begins as soon as the previous period reaches its end. In other words, the end of period 1 is the beginning of period 2 (or in general, the end of period N is the beginning of period N+1). Investors can use this option to craft strategies of directional view of the market.


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