Commodity derivatives are contracts whose value is derived from underlying commodities such as metals, agricultural products, and energy products. Commodity exchanges like the Multi-Commodity Exchange of India and National Commodity & Derivatives Exchange provide a platform for trading commodity derivatives and help farmers and businesses hedge risks from price fluctuations in commodities. Daily settlements in commodity derivatives exchanges determine closing prices and mark positions to market daily, while final settlements at contract expiry involve cash settlement based on final prices or physical delivery of commodities.