B.2.5 Example 5

The below examples explain the UIKI barrier option introduced instead of Single Knock In as per Swift 2023 standard.

Market price is greater than barrier

On 01-Mar-2023, Options Bank buys a call option on 1,000 GBP against USD with a strike price of 1.2 GBP. Maturity date is 31-Dec-2023 and Premium paid is 100 GBP.

Table B-60 Example for UIKI

Contract Type	Value
Trade date	Wednesday,01 March 2023
Value date	Wednesday, 01 March, 2023
Maturity date	Sunday, 31 December 2023
Contract Amount	1,000
Contract Currency	GBP
Counter Currency	USD
Option premium	100
Strike price	1.2
Current Spot Rate at the time of booking	1.2
Option Style	BINARY
Barrier type	UIKI ( Up and IN Knock In )
Expiration style	NA
Barrier	1.5
Fixed Amount to be paid	50
Fixed Amount Currency	GBP
Earliest exercise date	NA
Barrier Monitoring Period	1 March to 31 March

Knock In (KNIN) will fire since spot rate is higher than the barrier.

If at any time during 01-Mar-2023 and 31-Mar-2023, the spot rate goes higher than 1.5 GBP/USD, this option comes into effect (get knocked in) and the seller of the option becomes liable to pay a fixed amount of 50 GBP to Options Bank.

During window period, if barrier was never hit, the option will expire. All the cases are applicable for EOD processing and Manual Knock in and Knock Out screen (OTDXKIKO).