Description

Double barrier options are vanilla call and put options that are either activated or canceled based on the underlying reaching either a lower or upper barrier. There are two features that specify the type of barrier option. 1) In / Out -the option can either be activated (in) or canceled (out) as a consequence of hitting one of the barriers. 2) Call / Put - the two type of vanilla options. These two features result in a total of 4 different types of double barrier options. E.g. a in-call is a call which is activated when the underlying moves down or up and hits a barrier.