what is an example of a knock in option 
an example of a knock in option would be buying one to purchase a company s share for a strike price of 40 with a knock in price of 50 if the price of the stock does not hit 50 then no option exists if the price hits 50 then the option is activated which creates a regular option with a 40 strike price can anyone trade options yes anyone can trade options you do not have to work for a financial institution or other company to do this all you need is to open your own brokerage account however it is not that simple because options are more complex than trading regular stocks and bonds your broker will need to approve you to trade options based on multiple factors such as your trading experience your financial profile and your investment goals if you d like to trade options start by speaking to your brokerage to find out what is involved the bottom linebecause knock out options limit the profit potential of the investor they can be bought at a discount when compared to regular options if the buyer is fairly certain that the price cap of the asset that would cause the option to expire worthless won t be reached a knock out option is a good choice to take in a bit of extra profit as a result of not having to pay as much in premiums 