Options: Basic Definitions

This is an introductory article describing the features of option contracts and giving brief definitions of a number of specific contracts. The features are described by means of the following dichotonics: European/American, traded/OTC, physical/cash settlement, liquid/illiquid, vanilla/exotic and path-dependent/path-independent. The option classes defined are Asian, barrier, basket, Bermuda, chooser, digital, exchange, forward-starting, cliquet, lookback, passport, quanto, and Russian options. Most of these are covered in greater detail elsewhere in the encyclopacdia. Keywords: option contracts; option definitions; option classification; plain vanilla; exotic options