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rebate barrier option

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Financial Dictionary

Rebate Barrier Option

A barrier option that offers a predetermined rebate, should the option be 'knocked-out.'

Investopedia Commentary

Should a rebate be enacted, it will be deducted from the premium paid to the issuer, thus reducing the issuer's potential profit. For this reason, it is uncommon to see a rebate opportunity attached to a barrier option.

Related Links

Options Basics Tutorial

See also: Barrier Option, Double Barrier Option, Exotic Option, Knock-In Option, Knock-Out Option

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