SDX Commodities Help > Supported Instruments > Barrier Options > European-American Knock Out

European-American Knock Out

A European-American knock out (eako) is a vanilla option with these two barriers:

American barrier: If this is hit anytime during the life of the option the option is immediately knocked out.

European barrier: For this barrier, you define the barrier and whether there will be a payout if the underlying asset is above the barrier on the expiry date or below it.

If there is a payout (that is, the American barrier is not hit and on the expiry date the underlying asset is where you have defined in relation to the European barrier), the payout is that of the underlying vanilla option.