> For the complete documentation index, see [llms.txt](https://eako-capital.gitbook.io/eako-user-guide/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://eako-capital.gitbook.io/eako-user-guide/barrier-options/knock-in.md). # Knock-In ### Definition A Knock-In is a vanilla option that becomes alive (is "knocked-in") if the underlying spot breaches a predetermined barrier before maturity. ### Barrier For a regular Knock-In, the barrier is OTM, i.e., below the strike for a call and above the strike for a Put. For a reverse Knock-In (or "kick-in"), the barrier is ITM, i.e., above the strike for a call and below the strike for a Put. ### Premium The Knock-In premium is lower than that of a regular Vanilla option. The further away the barrier from spot, the lower the premium, as there is lower probability that the option will become alive before expiry. ### Payoff If the barrier is knocked-in, then the profile of a Knock-In option is the same as a regular Vanilla option. If the option is not knocked-in, the customer having a position in the underlying currency does not benefit from any FX hedge. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://eako-capital.gitbook.io/eako-user-guide/barrier-options/knock-in.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.