Commodity derivatives though present in India from late part of eighteenth century has emerged as an actively traded item only after the encouragement of commodity derivative exchanges during last decade. But it has grown to a significant level during last few years. Ever since its inception the market has witnessed suspensions and regulatory issues related to various commodities. Derivatives are financial contracts whose value is derived from the price of the underlying asset. The underlying assets can be shares, bonds, commodities, bullion, gold or any such assets. At the global level derivatives trading started with agricultural products to protect the farmers from price of their crop going below the cost price. The first organized exchange, the Chicago Board of Trade was established in 1848. In 1874, Chicago Mercantile Exchange was formed. These two exchanges are the two largest commodity derivatives exchanges in the world.