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What does devolvement of ITM commodity options mean and what impact does it have on my positions?

Devolvement means that the option contract will get converted into a futures contract of the same underlying. All In the Money(ITM) Commodity options will devolve into the underlying's futures contract. The buy average in case of take delivery or the sell average in case of give delivery of the futures contract will be the strike price of the devolved options contract.
All open ITM¹ options contracts will be devolved into futures on the expiry date of the options contract.

The exchange blocks a margin equivalent to 25% of the futures margin required to hold the ITM option contract 2 days before expiry and 50% of the futures margin, 1 day before expiry. 100% of the futures margin for devolvement. Failure to produce the margin in the trading account can lead to a square-off of open positions at the discretion of the RMS team. See Margin Calculator

Example - Gold is at 31500 levels. GOLD 19JAN 31000 CE is an ITM option contract. On expiry day, GOLD 19JAN 31000 CE will devolve into GOLD 19FEB FUT, with the buy average of 31000.

Notes

¹In case the exchange is unable to match your contract with a counter-party, your ITM options trade will be cash-settled instead of getting devolved into a futures contract.