Rebate Barrier Option

What does it mean?
A barrier option that offers a predetermined rebate, should the option be 'knocked-out.'

In Other Words...
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 - An introduction to the world of options, covering everything from primary concepts to how options work and why you might use them.

Related Terms
Barrier Option | Double Barrier Option | Exotic Option | Knock-In Option | Knock-Out Option

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