Glossary
Popular definitions
-
Keep the powder dryTo limit your trades due to inclement trading conditions. In either choppy or extremely narrow markets, it may be better to stay on the side lines until a clear opportunity arises.
-
KiwiNickname for NZD/USD (New Zealand dollar/US dollar).
-
Knock-insOption strategy that requires the underlying product to trade at a certain price before a previously bought option becomes active. Knock-ins are used to reduce premium costs of the underlying option and can trigger hedging activities once an option is activated.
-
Knock-outsOption that nullifies a previously bought option if the underlying product trades a certain level. When a knock-out level is traded, the underlying option ceases to exist, and any hedging may have to be unwound.
-
Knockout Options
A Knockout Option is a barrier option that will become worthless if the market reaches a specific price – known as a barrier level. At this point, the options contract is ‘knocked out’ and there would be no payoff.