We consider two independent retailers facing stochastic demand. Because of long lead-time and short selling season, retailers obtain goods from a supplier via option contracts. At the beginning of the selling season, retailers can adjust their positions by trading options with one another according to market demand. We focus on deriving how the possibility of such option trading between two independent retailers affects each retailer＇s optimal order and optimal trading profit. We show that there exists a unique Nash equilibrium, and retailers＇ optimal orders with option are all increasing in option＇s trading price. The retailer＇s optimal profit with option trading is higher without option trading. When the retailers face identical market structure, there exists a unique optimal option trading price and the retailer＇s optimal order with option trading is higher than without option trading. When retailers face identical Normal demand distribution, retailers＇ optimal option order and optimal expected profit are deceasing in the demand correlation coefficient