Concepts
Barrier
The single level that decides coupons and the maturity outcome.
Definition
The barrier is a price fixed at strike as a percentage of S0. It is stored in the series and never moves for the life of the note.
Two roles of the barrier
- Coupon gate. At observations #2 to #13 a close at or above the barrier pays the coupon; a close below pays nothing that week.
- Maturity switch. At #13 the barrier decides cash or stock. Earlier dips below it do not matter on their own.
Comparison operator
Equality favours CARRY: a close exactly on the barrier counts as holding.
Barrier in the app
Each series card shows the barrier in dollars and the cushion between the latest Chainlink print and the barrier. A stale feed is labelled as such.
Choosing a barrier
Deeper barriers mean a lower chance of receiving stock and a lower coupon. Templates set the barrier per underlying from its typical weekly range, so a volatile name such as COIN sits at 62% while AAPL sits at 85%.
Barrier and corporate actions
Stock Tokens express splits and dividends through a UI multiplier. Levels are compared on the multiplier-adjusted price, so a split does not trip the barrier.