Bond Education | Glossary
Barrier %
The percentage of the Strike Price in the underlying asset, at which the option comes into existence (Knock-In) or ceases to exist (Knock-Out). Reverse Convertibles are normally issued with a Strike Price set on the Initial Pricing Date. If the underlying asset price closes, on any day, below the Downside Protection amount of the Strike Price, the option is triggered or "knocked in.? This percentage is sometimes referred to as "Downside Protection" or "Downside Cushion".