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London Metal Exchange

Coordinates: 51°31′16″N 0°5′15″W / 51.52111°N 0.08750°W / 51.52111; -0.08750
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London Metal Exchange
Formation1877; 147 years ago (1877)
PurposeTrading in metals and metals-related contracts
OwnerHong Kong Exchanges and Clearing

The London Metal Exchange (LME) is a futures and forwards exchange with the world's largest market in standarised forward contracts, futures contracts and options on base metals. The exchange also offers contracts on ferrous metals and precious metals.[1] 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.

The LME is the last exchange in Europe where open-outcry trading takes place.[2] The ring was temporarily closed in March 2020 due to the COVID-19 pandemic.[3] In January 2021, LME proposed closing the ring, Europe’s last open-outcry trading floor, and moving permanently to an electronic system.[4][5]

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,[6] 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.[7] This was developed by a 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.[8] Jane Street Global Trading also sued LME for $15.3 million over its cancelled nickel trades in March.[9] Both lawsuits were filed in the English High Court.[10]

See also

References

  1. ^ "Forward & Futures Contract Specifications". London Metal Exchange. Retrieved 7 August 2015.
  2. ^ BBC Radio 4 Today, broadcast 25 October 2011.
  3. ^ Agini, Samuel (17 March 2020). "LME to shut down Ring trading after member tests positive for Covid-19". Financial News. Retrieved 5 March 2021.
  4. ^ Burton, Mark; Jack, Farchy (19 January 2021). "London's Raucous Trading Ring Calls Time on 144-Year History". Bloomberg News. Retrieved 5 March 2021.
  5. ^ Desai, Pratima (19 January 2021). "End of an era? London Metal Exchange proposes closure of open-outcry trade". Reuters. Retrieved 5 March 2021.
  6. ^ "Archived copy" (PDF). Archived from the original (PDF) on 26 March 2015. Retrieved 31 March 2015.{{cite web}}: CS1 maint: archived copy as title (link)
  7. ^ "LME Select". London Metal Exchange.{{cite web}}: CS1 maint: url-status (link)
  8. ^ "London Metal Exchange sued for $456m over cancelled trades". the Guardian. 6 June 2022. Retrieved 21 June 2022.
  9. ^ Smith, Elliot (7 June 2022). "London Metal Exchange hit with two U.S. lawsuits over nickel trading chaos". CNBC. Retrieved 21 June 2022.
  10. ^ "London Metal Exchange sued for $456m over cancelled nickel trades". BBC News. 6 June 2022. Retrieved 21 June 2022.

51°31′16″N 0°5′15″W / 51.52111°N 0.08750°W / 51.52111; -0.08750

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