In this lesson, we will explore the various oprions trade types for trading derivatives on. Understanding the unique features of each of these options will help you select the right tools for your trading strategies. Let’s dive into the details!
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Options Trade Types Offered by Deriv

Deriv provides a variety of derivative trade types commonly referred to as options, each designed to cater to different trading approaches and preferences:
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1. Accumulators

Accumulators are options that allow your returns to compound when the underlying index remains within a specified range. This means that gains don't simply add up; instead, they build on previous gains, leading to potentially larger overall profits. Accumulators are particularly beneficial for traders who anticipate steady market movements and want to leverage those trends over time.
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2. Vanillas

Vanilla options are straightforward contracts that come in two types: call options and put options. Your returns are proportional to how far the index value moves above or below your entry point. These options are a classic choice for traders who prefer a direct approach to trading, as they offer transparency and simplicity in their payout structure.
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3. Turbos

Turbos operate similarly to vanilla options but include a unique “knockout” feature that adds complexity to your trading. If the index hits a predetermined level, the contract expires, which introduces an additional layer of risk and reward. This feature allows traders to potentially capitalize on sharp market moves while managing their exposure to risk.
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4. Multipliers

Multiplier options combine the advantages of leverage with limited risk. When the market moves favorably, your profits multiply, creating opportunities for significant returns. However, if the market goes against you, your losses are capped at your initial stake—meaning you only risk the amount paid to enter into the contract. This aspect makes multipliers an attractive option for risk-conscious traders seeking high reward potential.
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5. Digital Options

Digital options allow you to predict outcomes based on two possible results. If your prediction is correct, you earn a fixed payout. If incorrect, your loss is limited to the initial stake, providing a straightforward risk profile with clear boundaries and no hidden surprises.
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Comparing Options with CFDs

Now, let’s compare options with Contracts for Difference (CFDs) available on Deriv:

• Leverage: Both options and CFDs involve leverage, enhancing potential returns. However, CFDs require a stop-loss to limit losses, while options automatically cap your maximum loss at the initial stake.
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• Returns: CFDs provide linear returns based on price movements, whereas options can yield nonlinear payouts. For example, digital options offer defined outcomes upfront, while vanilla options reveal actual results only upon contract expiration.
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• Open Duration: CFDs can remain open as long as you maintain sufficient margin, providing flexibility to adjust your strategy during the trade. In contrast, options operate on a fixed timeframe determined by you at the outset.
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• Margin and Costs: Options require only an upfront stake, with no ongoing margin requirements. CFDs may incur margin and overnight financing costs, impacting your overall trading expenses.
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Conclusion

In summary, understanding the different derivative instruments and trade types available on Deriv can give you a significant advantage in your trading activities. Accumulators, Vanillas, Turbos, Multipliers, and Digital options all provide unique benefits that can align with various trading strategies.

As you refine your trading approach, it's essential to choose the trade types that suit your risk tolerance and market outlook. In our next lesson, we will explore the different underlying assets available for trading with Deriv options. Thank you for joining this lesson, and happy trading!