Sugar options refer to financial derivatives that give the holder the right, but not the obligation, to buy or sell a specific amount of sugar at a predetermined price within a specified time frame. These options are traded on futures exchanges and are used by traders and investors to hedge against price fluctuations in the sugar market.

There are two types of sugar options: call options and put options. A call option gives the holder the right to buy sugar at a specified price, while a put option gives the holder the right to sell sugar at a specified price. Traders can use these options to speculate on the future price of sugar or to protect themselves from potential losses due to price changes.

Sugar options are popular among commodity traders and investors who are looking to diversify their portfolios and manage risk. They provide a flexible way to participate in the sugar market without having to physically buy or sell the commodity. Additionally, sugar options can be a useful tool for producers and consumers of sugar to lock in prices and protect against market volatility.