"Gold Option contract, with Gold (1 Kg) futures as underlying, expiring on November 28, 2017, and January 29, 2018, are made available for trading from today," the exchange said in a statement.
India is the world's second-biggest buyer of gold, typically importing around 800 tonnes a year, with the metal being used in everything from investment to religious donations and wedding gifts.
"The introduction of options gives a strong impetus towards systematic development and transformation of commodity derivatives market in India," MCX chairman Saurabh Chandra said in the statement.
Options give buyers the right to buy or sell an underlying asset at a specified price at the expiry and the risk is limited only to the premium paid to the seller of the option, the exchange said.
"In the long run, it may encourage increased trading and risk management activity of gold exposures through the financial markets such as futures and options."
In June, the markets regulator allowed hedge funds registered as category III Alternative Investment Funds (AIFs) to invest in commodity derivatives as clients, opening up the market to institutional investors for the first time.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)