In finance, the
style or
family of an
option is the class into which the option falls, usually defined by the dates on which the option may be
exercised. The vast majority of options are either
European or
American (style) options. These options—as well as others where the payoff is calculated similarly—are referred to as "
vanilla options". Options where the payoff is calculated differently are categorized as
"exotic options". Exotic options can pose challenging problems in
valuation and
hedging.