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DOWN AND OUT OPTION Definition & Legal Meaning

Definition & Citations:

A COMPLEX OPTION that extinguishes a standard EUROPEAN OPTION if the price of the UNDERLYING market reference declines through a predefined BARRIER. If the barrier is not breached the European option remains in effect. See also BARRIER OPTION, DOWN AND IN OPTION, KNOCKOUT OPTION, REVERSE KNOCKOUT OPTION, UP AND IN OPTION, UP AND OUT OPTION.


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