One-Touch Double Barrier Binary Option Values

Applied Financial Economics, Vol. 6, pp. 343-346, 1996

4 Pages Posted: 8 May 2007

See all articles by Cho-Hoi Hui

Cho-Hoi Hui

Hong Kong Monetary Authority - Research Department

Abstract

The valuation and applications of one-touch double barrier binary options that include features of knock-out, knock-in, European and American style are described. Using a conventional Black-Scholes option-pricing environment, analytical solutions of the options are derived. The relationships among different types of one-touch double barrier binary options are discussed. An investor having a particular view on values of foreign exchanges, equities or commodities can use the options as directional trades or structured products in financial market.

Keywords: barrier options, binary options, double-barrier options

JEL Classification: F31, G13

Suggested Citation

Hui, Cho-Hoi, One-Touch Double Barrier Binary Option Values. Applied Financial Economics, Vol. 6, pp. 343-346, 1996. Available at SSRN: https://ssrn.com/abstract=984808

Cho-Hoi Hui (Contact Author)

Hong Kong Monetary Authority - Research Department ( email )

Hong Kong
China

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