What is an Up and In Binary Call Option? | Definition

Up and In Binary Call Options include a predetermined strike price and a barrier level. A profit is only realized if the price of the underlying exceeds the defined barrier and the option is activated. If this barrier is not exceeded, the option expires worthless. Like all knock-ins, they offer a low-cost alternative for speculative exposure to the markets.

Up and In Binary Call Options in a nuthsell

  • Up-and-in binary call options are activated when the price of the underlying exceeds the barrier and offer low-cost market exposure.
  • Only profitable when underlying asset exceeds the defined barrier, initiating knock-in.
  • Option expires worthless if the underlying fails to exceed the barrier level.

Risk Considerations for Up-and-In Binary Call Options

Up-and-in binary call options, where the barrier is higher than the strike price, are interesting for traders who want to earn money in the financial markets. On the other hand, up-and-in binary call options where the barrier is lower than the strike are dangerous to trade, as the knock-in price profile is exactly the same as the binary option it would be converted into. As you can see, it is difficult to execute a risk-free binary options trade when buying or selling Up and In binary call options.

How to calculate Up and In Binary Call Options

The Up and In Binary Call Options profile is calculated by subtracting the Up and In Binary Put price from the One-Touch Call price, which is identical to the binary call option at the barrier.

The formula is:

Up-and-In Binary Call Options = One-Touch Call – Up-and-In Binary Put

About the author

Percival Knight
Percival Knight is an experienced Binary Options trader for more than ten years. Mainly, he trades 60-second trades at a very high hit rate. My favorite strategies is by using candlesticks and fake-breakouts

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