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Published On: Fri, Mar 29th, 2013

Plain Vanilla Option

A plain vanilla option is the simplest type of a basic option that is traded on an exchange, with no extra contract restrictions or features involved.

They are the opposite of exotic options, which are more complex and may trade over the counter instead of on an exchange. An option is a contract sold by an option writer to an option holder. An option gives a buyer the right, but not the obligation, to buy or sell a security or financial asset at pre-determined price during a specified time or date.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.

 

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