B
   
   Barrier Discontinuity
   















 

B

Barrier Discontinuity

Barrier options have an 'in' or 'out' condition triggered by touching or trading through an instrike or outstrike price. If the barrier condition can be satisfied only at certain times (e.g., the market close), or on certain dates, there is a barrier discontinuity, and evaluation of the option is more difficult.

Glossary * B