London Metal Exchange

The London Metal Exchange (LME) is the futures exchange with the world's largest market in options and futures contracts on base and other metals. As the LME offers contracts with daily expiry dates of up to three months from trade date, along with longer-dated contracts up to 123 months, it also allows for cash trading. It offers hedging, worldwide reference pricing, and the option of physical delivery to settle contracts. In July 2012, LME's shareholders voted to sell the exchange to Hong Kong Exchanges and Clearing for £1.4 billion.

It is located at 56 Leadenhall Street in the City of London.

Ring trading
Trading Times: 11:40 — 17:00, London Time

Open-outcry is the oldest and most popular way of trading on the exchange. It is central to the process of price discovery, the way LME official prices are established. Prices are derived from the most liquid periods of trading; the short open-outcry ring trading sessions, and are most representative of industry supply and demand. The official settlement price, on which contracts are settled, is determined by the last offer price before the bell is sounded to mark the end of the official ring.

There is constant inter-office trading, but a lot of trading is still done by open-outcry in the Ring. There are a morning and an afternoon trade, where each of the nine metal contracts are traded in two blocks with a five-minute session for each contract (the sessions last from 11.40 until 13.10 and from 14.55 until 16.15, each session includes a 10-minute break). The second trading block in the morning is key to setting the Daily Official Exchange rates. After the official trades of sessions one and two, there are 85 and 45 minutes of "kerb" trading respectively. Trades are in futures, options and TAPOs (traded average-price options, a form of Asian options).

The LME is the last exchange in Europe where open-outcry trading takes place.

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