Up-And-Out Option

A up-and-out option is a type of knock-out barrier option that ceases to exist when the price of the underlying security rises above a specific price level, called the barrier price. If the price of the underlying does not rise above the barrier level, the option acts like any other option giving the holder the right but not the obligation to exercise their call or put option at the strike price on or before the expiration date specified in the contract.