Barrier Events
A barrier event occurs when the underlying crosses the barrier level. While it seems straightforward to define a barrier event as "underlying trades at or above a given level," in reality it's not so simple. What if the underlying only trades at the level for a single trade? How big would that trade have to be? Would it have to be on an exchange or could it be between private parties? When barrier options were first introduced to options markets, many banks had legal trouble resulting from a mismatched understanding with their counterparties regarding exactly what constituted a barrier event.
Read more about this topic: Barrier Option
Famous quotes containing the words barrier and/or events:
“To say that a thing has never yet been done among men is to erect a barrier stronger than reason, stronger than discussion.”
—Thomas Brackett Reed (1839–1902)
“It is clear to everyone that astronomy at all events compels the soul to look upwards, and draws it from the things of this world to the other.”
—Plato (c. 427–347 B.C.)