Barriers in structured products: why and when

Barriers can be added to virtually all products that are capital-at-risk, with the most common being reverse convertibles and autocallables. The basic principle is that the risk to capital is only activated once the barrier has been breached. As is well known, the two different types of barriers are called American and European. American barriers apply during the whole lifetime of the product and are generally measured on a continuous basis, using either intraday or close of day values. In cont