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Explanation: You probably need to wait for our financial wizards to provide the definitive answer, but here's some info that might be helpful. A knock-out *option* is a form of derivative that gives the buyer the right, but not the obligation, to buy an underlying commodity, currency or other position at the present price.
Kim Metzger Mexico Local time: 17:35 Native speaker of: English PRO pts in category: 39
Explanation: Please see samples/ definition belwo with referencing web sites:
Die Kursschwelle, die vom Underlying über- bzw. unterschritten werden muß, damit Knock-Out-Border-Warrants sowie K.O.-Range-Warrants wertlos verfallen.
Again suppose USD/CHF spot is 1.84. An August 1.85 USD/CHF call with knock-out provision at 1.80 will have a premium which is determined by how likely it is that the knock-out barrier is reached. The closer the knock-out barrier is to the current market level the cheaper is the knock-out barrier option.
Underlying instrument price must NOT reach a lower barrier (knock-out boundary) during the option’s life. If the barrier is reached, the holder of the option is paid the rebate amount immediately, and the option simultaneously expires with no further pay outs.
Explanation: Most of the terminology has already been provided in the earlier replies (so give those points to one of the answerers above); I just need more space here than is available in the peer grading box...
The general term for "Kursschwelle" would be "price level" or "threshold"; maybe you could provide us with the sentence or paragraph - depending on the context, this might also be called "support" or "resistance" (in technical analysis).
The explanation given by Julia is correct in the context of exotic options, specifically those called "barrier" options: knock-in options which come alive if a certain price level is touched or broken, and knock-outs which expire immediately in that event.
Regarding your question, be careful: in a very specific context (see Julia's response and my explanation above), they might have the same meaning, whereas in general, there is a significant difference.
HTH - contact me directly if you need more background.
Own professional experience in financial markets (trading derivatives)
Ralf Lemster Germany Local time: 00:35 Specializes in field Native speaker of: German PRO pts in category: 419