Entering Foreign Exchange Data
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      3. Entering Foreign Exchange Data

      How to Enter a Barrier Option

      A quick guide on how to enter a barrier option into CNS

      Step 1: Access the Data Entry Screen

      1. In the left-hand menu, expand FX.
      2. Navigate to FX Enter Data → Add Currency Deals → Barrier Option

      Step 2: Select Option Type

      1. Choose Barrier Option from the deal type dropdown.

      2. Select the Barrier Type from the dropdown:

        • Knock In
        • Knock Out
        • Double Knock In
        • Double Knock Out
        • Knock In Knock Out

      3. Choose the Up/Down Variation based on the selected barrier type:

        • Knock In:
          • Down-In – Barrier is below the current market price and activates the option when reached.
          • Up-In – Barrier is above the current market price and activates the option when reached.
        • Knock Out:
          • Down-Out – Barrier is below the current market price and deactivates the option when reached.
          • Up-Out – Barrier is above the current market price and deactivates the option when reached.
        • Double Knock In:
          • Requires both Up-In and Down-In barrier levels.
        • Double Knock Out:
          • Requires both Up-Out and Down-Out barrier levels.
        • Knock In Knock Out:
          • Requires both an Up-In or Down-In and an Up-Out or Down-Out barrier level.

      4. Select the Style of the option:

        • American – Can be exercised anytime before expiry.
        • European – Can only be exercised at expiry.

      Step 3: Enter Barrier Option Details

      Fill in the required details:

      • Deal Date – The date the barrier option is agreed upon.
      • Provider – The counterparty providing the option.
      • Business Unit (Optional) – The internal entity associated with the trade.
      • Note (Optional) – Additional details or internal references.
      • Deal Number / Provider ID – Unique identifier from the provider.
      • Buy/Sell – Direction of the trade from your perspective.
      • Settlement Date – The date the option will be settled.
      • Currency 1 Amount (Notional Amount) – The principal amount of the option.
      • Currency 1 – The currency being bought/sold in the option contract.
      • Put/Call - select whether it is a Put or Call option
      • Strike Rate – The agreed exchange rate for exercising the option.
      • Currency 2 Amount (Counter Currency) – The equivalent amount in the counter currency.
      • Currency 2 – The currency being exchanged.
      • Barrier Rate – The price level at which the option is activated (Knock In) or deactivated (Knock Out).
      • Barrier 1 Window Start – The start date for observing the barrier condition.
      • Barrier 1 Window End – The end date for observing the barrier condition.
      • Rebate Amount – If applicable, enter the rebate value to be received if the barrier condition is met.
      • Premium Amount – The cost of purchasing the option.
      • Premium Currency – The currency in which the premium is paid.
      • Premium Payment Date – The date the premium is due.

      Figure shows Knock-Out example 

      Double Barrier Options (Double Knock In / Double Knock Out Only)

      If the selected option type is Double Knock In or Double Knock Out, or Knock In Knock Out enter:

      1. Barrier 2 Rate (second barrier level).
      2. Barrier 2 Window Start.
      3. Barrier 2 Window End.
      4. Select Up/Down for the second barrier:
        • Double Knock In: Up-In / Down-In
        • Double Knock Out: Up-Out / Down-Out
        • Knock In Knock Out: Up-In / Down-Out or Down-In / Up-Out

      Step 4: Review & Save

      1. Click the blue Calculate button to verify all figures.
      2. Click Save to finalise the option entry.
      3. Click the down arrow on the Save button to access additional options:
        • Save and Copy – If entering another similar option, this allows efficient data entry.
        • Save and Reverse – If entering the other leg of an option package, this will create a reversed option trade.
      4. Once all legs of the option package are entered, they can be linked in another area to form a package.