London Metal Exchange
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The London Metal Exchange (LME) is a futures and forwards exchange with the world's largest market in standarised forward contracts,
futures contract In finance Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of Production (economics), production, Distribution (economics), distribution, and Consumpti ...
s and options on
base metals A base metal is a common and inexpensive metal, as opposed to a precious metal such as gold or silver. In numismatics, coins often derived their value from the precious metal content; however, base metals have also been used in coins in the past ...
. The exchange also offers contracts on ferrous metals and
precious metals Precious metals are rare, naturally occurring metallic chemical elements of high Value (economics), economic value. Chemically, the precious metals tend to be less reactivity (chemistry), reactive than most elements (see noble metal). They ...
. The company also allows for cash trading. It offers hedging, worldwide reference pricing, and the option of physical delivery to settle contracts.


Overview


Ring trading

Trading Times are 11:40 to 17:00
GMT
GMT
. The LME is the last exchange in Europe where open-outcry trading takes place.BBC Radio 4 '' Today'', broadcast 25 October 2011. The ring was temporarily closed in March 2020 due to the
COVID-19 pandemic The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identif ...

COVID-19 pandemic
. In January 2021, LME proposed closing the ring, Europe’s last open-outcry trading floor, and moving permanently to an electronic system. In addition to the 9 companies that have exclusive rights to trade in the Ring, around 100 companies are involved in the LME in total.


Precious metals

The LME used, however, to provide trade matching and clearing services to the London bullion market and distributes gold, silver, and gold IRS ( interest rate swaps) forward rates on behalf of the LBMA.


Electronic trading

The LME launched an electronic platform called LME Select launched in February 2001. This was developed by a
Swedish
Swedish
software house Cinnober. The platform is a FIX-based trading platform, and now handles a majority of the total LME business.


Controversies


Lawsuits

In March of 2022, LME was sued by Elliot Management, an American hedge fund. The hedge fund sued for $456 million, claiming that LME acted "unreasonably and irrationally" when it canceled nickel trades made on March 8th, 2022. Jane Street Global Trading also sued LME for $15.3 million over its cancelled nickel trades in March. Both lawsuits were filed in the English High Court.


See also

*
List of futures exchanges This is a list of notable futures exchanges. Those stock exchange A stock exchange, securities exchange, or bourse is an Exchange (organized market), exchange where stockbrokers and stock trader, traders can buy and sell security ...
*
London Platinum and Palladium Market The London Platinum and Palladium Market (LPPM) is an Over-the-counter (finance), over-the-counter trading centre for platinum and palladium and a commodity trading association. London has always been a centre for the research in and development o ...


References


External links


London Metal Exchange
{{Coord, 51, 31, 16, N, 0, 5, 15, W, type:landmark_region:GB, display=title Financial services companies established in 1877 Commodity exchanges in the United Kingdom Organisations based in the City of London Buildings and structures in the City of London Futures exchanges 1877 establishments in the United Kingdom Organizations established in 1877 Metal industry