The American one touch with American knock out (aotako) option is a American One Touch option with a knock out barrier added.
There are two types of one touch with knock out, for both of which you define two barriers (an American barrier for the one touch option and the added American knock out barrier):
Knock out until expiration
For this type of one touch with knock out option, you must not define the knock out barrier between the underlying asset and the one touch barrier.
The barrier of the one touch option must be hit to activate the fixed payout specified in the option. In addition, the knock out barrier (which if hit causes the option to be immediately terminated) is valid throughout the option's lifetime. That is, even if the payout is activated, it can be terminated at any time during the option's life by the knock out barrier being hit.
If during the lifetime of the option, the one touch barrier is hit first (activating the payout) and the knock out barrier is not hit, the fixed payout is made on the delivery date. If the knock out barrier is hit at any time, no payout will be made.
Knock out until one touch
For this type of one touch with knock out option, you must define the underlying asset between the one touch barrier and the knock out barrier.
If during the life of the option the:
Knock out barrier is hit first (or the one touch barrier is not hit at all during the option's life) there is no payout.
One touch barrier is hit first, the knock out barrier is no longer valid and the fixed payout specified in the option is made on the delivery date.