What are vanilla options on the Deriv Binary Options Platform?

What are vanilla options on the Deriv Binary Options Platform?

Vanilla options allow you to express a bullish or bearish view of an underlying asset by purchasing either a Call or a Put option. You can earn a potentially high payout if your predictions are right within a timed contract and based on market conditions.

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What are vanilla options  – How do vanilla options work?

Call/Put

Call option

You will receive a payout at the contract’s expiry if the final price is higher than the strike price (which is determined at the beginning of the contract period). If the final price is at or below the strike price, you will lose your initial stake (premium).

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 price of the underlying asset rises significantly. Your losses are limited to the initial stake required to purchase the call option.

A chart illustrating a vanilla call option trade payoutA chart illustrating a vanilla call option trade with no payout
Put option

You will receive a payout at the contract’s expiry if the final price is lower than the strike price (which is determined at the beginning of the contract period). If the final price is at or above the strike price, you will lose your initial stake (premium).

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 price of the underlying asset falls significantly. Your losses are limited to the initial stake required to purchase the put option.

A chart illustrating a vanilla put option trade payoutA chart illustrating a vanilla put option trade with no payout - What are vanilla options

Why do traders choose vanilla options?

In addition to their simplicity to understand, the main reason traders choose to trade vanilla options is that they offer potentially high profit as they do not have a fixed payout, while 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 (also known as an option premium). This is the cost of entering a vanilla options trade.

If your market predictions are right within the contract period, you will receive a payout that is equivalent to the asset’s movement when the contract ends (or upon early termination).

If you decide to manually terminate the trade early (before the contract’s expiry), you will be charged an additional exit fee. Please note that it is not possible to terminate a contract with 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 (which is 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 amount of 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 amount of payout you’ll gain for each point below the predetermined strike price, at the contract’s expiry.

Please note that this payout does not equal potential profit. You’ll only earn a potential profit once the payout amount exceeds your stake amount.

Where can I 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 at the same time?

Yes, you can open multiple vanilla options contracts at the same time, depending on your options trading strategies.

Are vanilla options available on Deriv Bot?

No, vanilla options are not currently available on the Deriv Bot trading platform.

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What are vanilla options

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