Autocall barrier
Definition · Level 12 · Exotics & structured
Keep reading with Tradecraft
Without a subscription, you can read three definitions every 30 days. Tradecraft explains all 988 terms and strategies, with the lessons that teach them, flashcards that come back before you forget, quizzes and a payoff lab.
The level, usually 100% of the starting level, at or above which the note is called on an observation date. Also called the autocall trigger.
Example
Barrier 100%: the index at 103% on the year-2 date → the note is called.
Where Tradecraft teaches it
Level 12 · Exotics & structured, in the lesson “Autocallable notes”: A note that ends early in good years: observation dates, barriers, memory coupons, and who is long what.
Related terms
- AutocallableNote that repays early, at par plus a coupon, if the underlying is at or above the autocall barrier on an observation date.
- Dividend futuresExchange-traded contracts on the dividends an index pays in a given calendar year.
- Memory couponFeature where missed conditional coupons are paid later if the underlying is back above the coupon barrier on a future observation date.
- Observation dateA date on which the note’s conditions are checked: is the index at or above the autocall barrier?
- Phoenix autocallAutocall that pays a coupon on each observation date where the underlying is above a coupon barrier set below the autocall barrier, so coupons can…
- Protection barrierLevel (e.g. 60% of the start) at or above which an autocall that was never called repays full capital; below it the investor loses one-for-one from…