Down and out call option

A down and out call option is a type of barrier option that becomes worthless if the underlying asset's price falls below a specified barrier level during its life. If the asset stays above this barrier, the option remains valid and can be exercised if it is in the money at expiration. These options are often cheaper than standard call options due to the added risk of expiring worthless if the barrier is breached. They are used by investors looking for protection against significant declines in asset prices.