What are vanilla options on the Deriv Binary Options Platform?
What are vanilla options – How do vanilla options work?
Call/Put
Call option
If the final price exceeds the strike price (determined at the beginning of the contract period), you will receive a payout at the contract’s expiry. You will lose your initial stake (premium) if the final cost exceeds the strike price.
Your net profit will depend on how much the final price is above the predetermined strike price, with the maximum potential gains growing if the underlying asset price rises significantly. Your losses are limited to the initial stake required to purchase the call option.
Put option
If the final price is lower than the strike price (determined at the beginning of the contract period), you will receive a payout at the contract’s expiry. You will lose your initial stake (premium) if the final cost exceeds the strike price.
Your net profit will depend on how much the final price is below the predetermined strike price, with the maximum potential gains growing if the underlying asset price falls significantly. Your losses are limited to the initial stake required to purchase the put option.
Why do traders choose vanilla options?
In addition to their simplicity of understanding, traders mainly choose to trade vanilla options because they offer potentially high profits as they do not have a fixed payout. At the same time, losses are strictly limited to the initial stake amount.
What are vanilla options – Browse our FAQ
How do I place a vanilla options trade?
To place a vanilla options contract, you’ll need to:
– Select the underlying asset you want to trade.
– Determine your contract duration or end time.
– Predict the asset’s price movement by choosing Call or Put.
– Select your preferred strike price
– Enter your stake.
– Purchase the contract
What are vanilla options – Can I buy and sell vanilla options?
Currently, you can only buy vanilla calls and put options on Deriv.
What are vanilla options – How are vanilla options contracts settled?
When you purchase a contract, you’ll pay a stake (an option premium), the cost of entering a vanilla options trade.
If your market predictions are right within the contract period, you will receive a payout equivalent to the asset’s movement when the contract ends (or upon early termination).
You will be charged an additional exit fee if you manually terminate the trade early (before the contract’s expiry). Please note that it is not possible to terminate a contract less than 15 seconds before expiry.
What is the payout per point?
Payout per point indicates the payout you will receive for each point above or below the strike price (selected before you enter the contract) within the contract period. This amount will depend on your stake.
For Call options, payout per point indicates the payout you’ll gain for each point above the predetermined strike price at the contract’s expiry.
For Put options, payout per point indicates the payout you’ll gain for each point below the predetermined strike price at the contract’s expiry.
So, as you know, this payout does not equal potential profit. You’ll only earn a potential profit once the payout amount exceeds your stake amount.
Do you know where I can trade vanilla options on Deriv?
You can trade vanilla options on Deriv Trader. They are offered on volatility indices.
What are vanilla options – Can I open multiple vanilla options contracts simultaneously?
Depending on your options trading strategies, you can open multiple vanilla options contracts simultaneously.
Are vanilla options available on Deriv Bot?
No, vanilla options are unavailable on the Deriv Bot trading platform.
What are vanilla options