# Barrier Option

*Derivatives & Options — Finicade finance glossary*

An option that switches on or off if the price touches a set level — a 'knock-in' comes alive, a 'knock-out' dies. Cheaper than a vanilla option because that trigger can cancel the payoff entirely.

**Also known as:** barrier, knock-in put, knock-out, in-out-parity, in out parity

**Related terms:** [Exotic Option](https://finicade.com/glossary/exotic-options), [Path Dependence](https://finicade.com/glossary/path-dependence), [Option](https://finicade.com/glossary/option)

**Taught in:** Hull Street — Anatomy of an Autocallable

Source: https://finicade.com/glossary/barrier-option