Deriv trade typesUpdated 3 min readBy the FXNOD team
Vanilla options on Deriv: calls, puts and strike prices
A vanilla option on Deriv is a Call or a Put against a strike price. A Call earns a payout if the final price is above the strike at expiry, and a Put if it is below. The payout is the payout per point multiplied by the distance between the final price and the strike. The most you can lose is the stake.
Call and Put
| Type | Pays if | Payout |
|---|---|---|
| Call | The final price is above the strike | Payout per point times the amount above the strike |
| Put | The final price is below the strike | Payout per point times the amount below the strike |
A worked example
Buy a Call with a strike of 100.00, a payout per point of 20 and a stake of 10. At expiry: a final price of 99.80 pays nothing and the 10 is lost. A final price of 100.30 pays 6, a loss of 4. A final price of 100.50 pays 10 and breaks even. A final price of 101.50 pays 30, a profit of 20. As with turbos, Deriv notes that you profit only if the payout is higher than the stake.
What the strike changes
| Strike for a Call | Payout per point | Behaviour |
|---|---|---|
| Below the current price | Lower | More likely to pay something; needs less of a move |
| At the current price | Middle | Balanced |
| Above the current price | Higher | Pays nothing unless the price rises past the strike |
Deriv's glossary says the payout per point depends on the relation of the strike to the spot price. A strike that is harder to reach buys more exposure per unit of stake.
Vanillas and turbos compared
| Vanilla | Turbo | |
|---|---|---|
| Reference level | Strike | Barrier |
| Knocked out early | No | Yes, if the barrier is touched |
| Price dips then recovers | Does not matter; only expiry counts | May already have ended the contract |
What works against you
- Time: an option that has not moved far enough by expiry returns less than it cost.
- Pricing: Deriv's terms say its calculations include a bias in its favour.
- Being right about direction is not enough. The move has to be large enough, soon enough.
In FXNOD
Vanillas are in Trade Pilot and are a trade type a Bot Forge bot can buy. Check the quote for your strike and duration before buying.
Questions people ask
- What is a strike price?
- The price a vanilla option is measured against. A Call pays for the distance the final price is above it, a Put for the distance below.
- What is the maximum loss on a vanilla option?
- The stake you paid for the contract.
- Are vanilla options good for beginners?
- They are harder to reason about than Rise/Fall, because being right on direction can still lose money. Practise on demo first.
Try this contract on demo
Every trade type in these guides is in Trade Pilot, and a bot in Bot Forge can buy it. Read the quoted payout and try it with Deriv's virtual funds.
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