What are exotic options?
Exotic options are hybrid financial securities that offer unique and customizable payment structures, expiration dates, and strike prices. Light exotics are structures that include one or more vanilla options strategies and one exotic quality. Heavy exotics are structures that include more than one exotic quality.
Vanilla Option | Exotic Option | |
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Definition | Basic financial derivative. Call option or put option with no special or unusual features. | Financial derivative often involving multiple vanilla options and additional features/customizations. |
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Last modified 6mo ago