Knock-In Cap or Floor

A cap or floor that only comes alive, or knocks in when some defined barrier (the knock in level) is reached on a rollover date. The cap or floor can either come alive for the entire remaining life of the option or only for the period to which that fixing applies. Interest rate caps and floors can be Knocked-In with reference to a wide range of underlyings, including LIBOR, FX, commodity and equity levels.