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| Knock Out | A knockout call type product is a structured product which matures early if the underlying has risen to a specified level on a fixed date during the term.
For example, a growth product might offer a minimum return of 100% plus 100% of the rise in theFTSE100 index after six years but pay out 130% after three years if the index has risen by 30% or more at this date. |
| Knockout / Knockin | A knockout or knockin feature is a characteristic of a structured product whereby the return is dependant on the underlying reaching, or not reaching, a pre-specified level at some time during theterm of the investment.
An example would be a Reverse Convertible where the risk to capital only arises if the underlying falls by a fixed amount at some time during the term of the investment. This level is called the barrier level and if the underlying reaches this level then the derivative or option that is used to create the product is said to have knocked-in. |
| Knockout Date | The date at which the knockout feature could be activated, provided the knockout level is reached. |
| Knockout Level | The level, expressed as a percentage above the strike level, which the underlying needs to reach at the knockout date in order to activate the knockout feature. |
| Knockout Payout | This is the amount received by the investor shortly after the knockout date, expressed as a percentage of the capital invested, if the knockout feature has been activated. |