Double barrier options are options linked to two conditions (barriers). These barriers represent the upper and lower limits. The meaning of these limits depends on the type of barrier option.

The double barrier option Up&In Up&Out (Double barrier option Down&In Down&Out) is ready for knock-in as soon the specified lower limit has been exceeded (or if the upper limit is not reached). If the opposite occurs, the specified upper limit has been exceeded (or if the lower limit is not reached, the double-barrier option is ready for knock-out. In both cases, the double-barrier option is equally effective if you have executed a knock-in, but have not yet executed a knock-out.

This IDES process describes a double-barrier knock-in option. The Double-barrier option Knock-in (Double-barrier option Knock-out) becomes effective (Knock-in) (or does not (Knock-out)), if either the specified upper limit is exceeded by the market or if the specified lower limit is exceeded by the market, assuming that the knock-out option has not yet been used.