In finance, a barrier option is an exotic derivative typically an option on the underlying asset whose price breaching the pre-set barrier level either springs the option into existence or extinguishes an already existing option.

• Where the option springs into existence on the price of the underlying asset breaching a barrier, it may be known as an "up and in," "knock-in," or "down and in" option.
• Where the option is extinguished on the price of the underlying asset breaching a barrier, it may be known as an "up and out," "knock-out," or "down and out" option.