A knock-in barrier option is harder to hedge when it is: A. in-the-money. B. at the barrier and near maturity. C. out-of-the-money. D. at the inception of the trade.
Owing to their inherent discontinuities, both knock-in and knock-out barrier options are relatively difficult to hedge (and value) when the spot price is close to the barrier price and the contract is near maturity.
