Keep the powder dryTo limit your trades due to inclement trading conditions. In either choppy or extremely narrow markets, it may be better to stay on the side lines until a clear opportunity arises.
Kiwi in ForexKiwi is the colloquial name for the New Zealand Dollar (NZD), coined after the flightless Kiwi bird featured on the island nation’s $1 coin. In forex pairs the NZD is often referred to as the ‘Kiwi.’
Knock-in optionsA knock-in option is a type of options contract that is not activated until a predetermined price is reached. The knock-in options contract is inactive until that price is reached. Knock-in options are one example of a barrier option: options contracts with earnings dependant on whether the underlying asset reaches a specific price level, referred to as the barrier price. In the case of a knock-in option, the barrier price must be achieved or surpassed before the option’s expiration in order to become active. There are two types of knock-in options:
- Down-and-in options, which are activated when the underlying asset’s price dips below the barrier price
- Up-and-in options, which are activated when the asset’s price rises above the barrier price
Knock-outsOption that nullifies a previously bought option if the underlying product trades a certain level. When a knock-out level is traded, the underlying option ceases to exist, and any hedging may have to be unwound.
A knock-out option is a type of option that expires or “knocks out” if the asset surpasses or falls below a certain price. The knock-out options contract is active until the predetermined price is hit.
Knock-out options are one example of barrier options: options contracts with earnings dependant on whether the underlying asset reaches a specific price level, referred to as the barrier price.
Until the asset reaches the barrier price or expires, the knock-out options contract is active. If the barrier price is reached, the options contract expires prematurely. There are two types of knock-out options:
- Down-and-out options are active until the asset dips to or below a predetermined barrier price.
- Up-and-out options give the holder the right to buy or sell an asset at a specific price if the option does not rise to or past a specific barrier price.