Down-and-In Put Option

Down-and-In Put Option: Guardian Angel Depth Charge

Cheapen downside protection by activating right to sell when market sinks below a certain level and detonating like a finely calibrated depth charge acting as a guardian angel; stepping in when the market falls too much.

i. Select Desired Direction [UP/DOWN]

ii. Will (WETH) move ‘a lot’? ( ‘Knock IN’ )

Will (WETH) move ‘not too much’? ( ‘Knock OUT’ )

iii. [UP/DOWN] [Knocks In ( effective ) / Knocks Out ( extinguished )] if (WETH) @ Expiry beyond barrier.

+ / DOWN / IN

Buy DOWN and In and pay premium if you think ETH @ Expiry DOWN from <strike price> and INside ( < ) <barrier>; if NOT, premium lost.

- / DOWN / IN

Sell DOWN and In and earn premium if you think ETH @ Expiry NOT DOWN from <strike price> OR NOT INside ( > ) <barrier>; if NOT, pay strike - ETH

Down-And-In Put Option Contract

An Down-And-In Put Option Contract is a contract that gives the buyer (the owner or holder of the contract) the right to sell the Underlying Currency at the specified Strike Price upon exercise of the contract, if the Reference Price is equal or below the Barrier Level. The contract seller has the corresponding obligation to buy the Underlying Currency at the specified Strike Price if the Reference Price is below the Barrier level upon exercise of the contract

Dal PK, B

Down-and-in put option with strike K and knock-in if ST <B at expiry

Payout at expiry =

If ST < B: max(K-ST, 0)

If ST ≥ B: zero

Eg. Payout of an down-and-in put option on eth/S with K=100, B=85