It’s impossible to understand how commodity options work without knowing what commodity option contracts are.
An option gives you the right to buy or sell an asset at a fixed price (known as a strike price), but you’re not under any obligation to take up this opportunity. Literally, you have the option of whether to buy or sell — but only for a certain period of time.
The point at which you can exercise your contract depends on which type of options contract you take out:
European-style options have found favor in India, and all option contracts in the contract expire on the same day: The final Thursday of the month.