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.