What are knock-outs?
Knock-outs are a CFD trade on an option. They can only be bought to open, which means that they cannot be sold to open. There are two types of knock-out available: bull and bear.
- You’d buy a bull knock-out if you believe the price of the underlying market will rise
- You’d buy a bear knock-out if you believe the price of the underlying market will fall
What are the characteristics of Knock-outs?
Knock-outs move one-for-one with the underlying market – meaning that for every point the underlying moves, the price of the knock-out moves the same amount.1
You can close your position at any time before expiry – unless the knock-out level is reached, in which case the position will be automatically closed.
1This is not the case when the knock-out premium changes. If the knock-out premium changes, the price of the knock-out will move by the amount the premium changes.
On which markets can I trade knock-outs?
Knock-outs trading provider IG offers this product across a range of popular markets 24 hours a day, including:
- Major forex pairs
- Global stock indices
- Commodities
