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Plain Vanilla Option

Plain Vanilla Option Definition

This is the standard type of option that has a simple expiration date and a strike price with no additional features.  Plain vanilla options are the simplest form of options, as compared to an exotic option.  Call options allows the investor to buy a stock at a specific price (strike price) on or before the option contract hits its expiration date.  A put option allows the investor to sell a stock at a given price over a specific time period. 


Additional meaning of Plain Vanilla Option:

Plain Vanilla Options are widely traded and come in two forms: American style options, which allow investors to exercise the option prior to expiration, and European style options, which can only be exercised during expiration.





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