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Abstract
An extensive variety of commodities can be gainfully traded over the world for many centuries. Certain commodities are seasonal in nature, certain commodities oscillate due to seasonal variations in climate and certain commodities may change due to global events. The organized commodity derivatives market in India has been in operation since 2003. Since its commencement in 2003 the trading volume and interest of investors in Indian commodity derivatives exchange has been steadily increasing. In a gigantic move to broaden the range of commodity derivatives segment in India, its regulator has newly permitted options trading on national commodity exchanges. This is the biggest milestone in Indian commodity derivatives market and it happened on October 17, 2017. After its inception there is a significant development in commodity derivatives. Commodity option trading exhibited tremendous progress both in positions of number of agreements trades and turnover. Total turnover of option trading has increased from Rs. 10,652.31 Cr in 2017-2018 to Rs.1,81,118.87 Cr in 2018-2019. Option trading offers investors with the finest opportunity to find rewards that propitiate almost anybody’s financial objectives. Therefore, the present study is an attempt to examine the evolution of option trading in commodity derivative market, trading mechanism in its various product contracts, theperformance of option products in commodity segment, dynamics and discourseof optiontrading in Indian commodity derivatives market.