One-Touch Double Barrier Binary Option Values
Applied Financial Economics, Vol. 6, pp. 343-346, 1996
4 Pages Posted: 8 May 2007
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: Suggested Citation