A breed of exotics that has developed as simple or standard additions/ features to derivatives (as opposed to 2nd generation exotics that have more sophisticated or complicated additions/ features). For example, a barrier option may be set to knock in or out if the underlying hits a barrier (or one of two barriers). Likewise, touch options including one-touch options and no-touch options pay a fixed amount of if the underlying price ever/ never trades at or through the touch-level (barrier) and nothing if it doesn’t. Double-touch options provide the same mechanism, but subject to two barriers.
Other examples of first-generation options include compound options, installment options, power options, lookback options, Asian options (geometric, arithmetic, etc.)
