Naming conventions are used to help identify properties common to many different types of options. These include:
- European option - an option that may only be exercised on expiration.
- American option - an option that may be exercised on any trading day on or before expiration.
- Bermudan option - an option that may be exercised only on specified dates on or before expiration.
- Barrier option - any option with the general characteristic that the underlying security's price must pass a certain level or "barrier" before it can be exercised
- Exotic option - any of a broad category of options that may include complex financial structures.
- Vanilla option - by definition, any option that is not exotic.