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Binary options are complex, exotic trade options, but these are particularly simple to utilize and understand the way they work. The most familiar type of binary option it the high-low option and it’s relatively simple to comprehend.

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Some types of exotic options restrict exercise dates. The lowest-cost option is a European option, which can only be exercised on its expiry date. But if more flexibility is needed, a Bermuda option can be exercised on specific dates ahead of its expiry date.

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In finance, an exotic option is an option which has features making it more complex than commonly traded vanilla options. Like the more general exotic derivatives they may have several triggers relating to determination of payoff.

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