Global LME Metals Futures
Introduction
The origin of the London Metal Exchange (LME) can be traced back to 1571 and was not officially established until 1877. It is the largest non-ferrous metal exchange in the world today.
- In 2012, LME was wholly-owned by the HKEx Group. It is an active trading platform that can provide 24-hour trading.
- Real options, futures and cash-settled futures contracts traded include: aluminum, aluminum alloys, copper, gold, silver, steel, lead, nickel, tin, zinc, and more.
- The LME has its own clearing house, LME Clear, to reduce counterparty risk in the metal market and is regulated by the Bank of England.
Trading methods
Most of the non-ferrous metals (also known as "base metals") futures on the LME is conducted in the following three trading venues: LMEselect (electronic platform), trading circle (open outcry market) and 24-hour phone trading market.
- LMEselect (electronic platform)
Trading hours: London time 01:00 – 19:00
Hong Kong local time: 8:00 –2:00 the next day (summer time ) 9:00 –3:00 the next day (winter time)
*Special remark: LME precious metals trading hours on LMEselect is 01:00 – 20:00
Hong Kong local time: 8:00 –2:00 the next day (summer time ) 9:00 –3:00 the next day (winter time)
*Special remark: LME precious metals trading hours on LMEselect is 01:00 – 20:00
- Trading Circle (Open Outcry Market)
Trading hours: London time 11:40 – 17:00
Hong Kong local time: 18:40 – 00:00 (summer time) 19:40 – 1:00 the next day (winter time)
Liquidity is concentrated in the so-called “Rings (trading circle) ”, open outcry remains the most efficient way to buy and sell multiple expiry dates. Affected by Covid-19, the open outcry system "trading circle" that has been maintained for 144 years was suspended from March 2020 to September 2021. LME is currently the only exchange in Europe that retains this system.
Liquidity is concentrated in the so-called “Rings (trading circle) ”, open outcry remains the most efficient way to buy and sell multiple expiry dates. Affected by Covid-19, the open outcry system "trading circle" that has been maintained for 144 years was suspended from March 2020 to September 2021. LME is currently the only exchange in Europe that retains this system.
- Inter-office Telephone Market
Trading hours: 24-hour
Real-time bid and ask prices are provided 24 hours a day by LMElive (LME's market data service) and accredited data providers.
Real-time bid and ask prices are provided 24 hours a day by LMElive (LME's market data service) and accredited data providers.
Market Maker Mechanism
LME adopts a market-making system in the international phone trading market and in the circle trading market, and can choose to wait for a transaction at a fixed price and contract lot size (work to buy/sell); or ask the market maker for a fixed contract lot size Quote (quote market price), the bidder is called the Dealer, and the dealer representing the market maker will give a quote according to his position and views on the market.
Daily Delivery Mechanism
The LME is very different from COMEX market, the LME is not delivered on a monthly basis (each month has a fixed delivery date), but daily delivery (most dates that are not holidays can be delivery dates). When buying or selling a contract, the LME will confirm that the contract is a day after three months (holiday postponed).
At the same time, LME does not have a mechanism for opening and closing positions. For example, if you buy a lot of March copper on 1st March (the delivery date is 1st June), the contract due for delivery can be moved forward and backward through carry trade. So that the relevant buy and sell contracts will be hedged on the corresponding delivery date.
At the same time, LME does not have a mechanism for opening and closing positions. For example, if you buy a lot of March copper on 1st March (the delivery date is 1st June), the contract due for delivery can be moved forward and backward through carry trade. So that the relevant buy and sell contracts will be hedged on the corresponding delivery date.
Backwardation& Contango Mechanism
LME contracts have different delivery dates, and the spread between different delivery dates is called Backwardation& Contango. Changes in Backwardation& Contango vary according to market supply and demand, and there is no fixed pattern. For participants, the change in the price difference between Backwardation and Contango is a reference element of inter-period and cross-market arbitrage.(Backwardation/Contango).
LME contracts have different delivery dates, and the spread between different delivery dates is called Backwardation& Contango. Changes in Backwardation& Contango vary according to market supply and demand, and there is no fixed pattern. For participants, the change in the price difference between Backwardation and Contango is a reference element of inter-period and cross-market arbitrage.(Backwardation/Contango).
Sino-Rich LME
- Fast and stable online trading platform
- Customers can self-service trade on LMEselect and CME electronic platform
- Real-time display of LME and CME positions and interests in the same account
- Cooperate with arbitrage customers to provide programmatic trading ports
Common trading varieties:
Exchange | Underlying metal | Contract Unit | Minimum Fluctuation | Prompt Dates | Last Trading Day | Trading Hours(HK Time) |
LME | LME Copper （LCA） | 25 tonnes | 0.5 per tonne=$12.5 | Daily: out to 3 months | Up until the close of the first Ring the day before the prompt date | 08:00 - 02:00Next Day |
| LME Aluminium （LAH） | ||||||
| LME Zinc （LZS） | ||||||
| LME Nickel （LNI） | 6 tonnes | 5 per tonne=$30 | ||||
| LME Lead （LPB） | 25 tonnes | 0.5per tonne=$12.5 | ||||
| LME Tin （LSN） | 5 tonnes | 5 per tonne=$25 |
*This time is converted from the local summer time. If the local winter time is implemented, please delay the time by one hour
Disclaimer: The information and materials contained in the website are compiled by Sino-Rich Securities, and we are committed to ensuring the information contained in this website is accurate at the time of publication (November 2021). It is not exhaustive and is for reference only. For updated information, please refer to the website of each Exchange.
Global LME Metals Futures
Introduction
Trading methods
Introduction
The origin of the London Metal Exchange (LME) can be traced back to 1571 and was not officially established until 1877. It is the largest non-ferrous metal exchange in the world today.
- In 2012, LME was wholly-owned by the HKEx Group. It is an active trading platform that can provide 24-hour trading.
- Real options, futures and cash-settled futures contracts traded include: aluminum, aluminum alloys, copper, gold, silver, steel, lead, nickel, tin, zinc, and more.
- The LME has its own clearing house, LME Clear, to reduce counterparty risk in the metal market and is regulated by the Bank of England.
Most of the non-ferrous metals (also known as "base metals") futures on the LME is conducted in the following three trading venues: LMEselect (electronic platform), trading circle (open outcry market) and 24-hour phone trading market.
- LMEselect (electronic platform)
London time 01:00 – 19:00
Hong Kong local time:
8:00 –2:00 the next day (summer time )
9:00 –3:00 the next day (winter time)
*Special remark: LME precious metals trading hours on LMEselect is 01:00 – 20:00
Market Maker Mechanism
Daily Delivery Mechanism
Backwardation& Contango Mechanism
LME contracts have different delivery dates, and the spread between different delivery dates is called Backwardation& Contango. Changes in Backwardation& Contango vary according to market supply and demand, and there is no fixed pattern. For participants, the change in the price difference between Backwardation and Contango is a reference element of inter-period and cross-market arbitrage.(Backwardation/Contango).
*Special remark: LME precious metals trading hours on LMEselect is 01:00 – 20:00
- Trading Circle (Open Outcry Market)
Trading hours: London time 11:40 – 17:00 Hong Kong local time: 18:40 – 00:00 (summer time) 19:40 – 1:00 the next day (winter time)
Liquidity is concentrated in the so-called “Rings (trading circle) ”, open outcry remains the most efficient way to buy and sell multiple expiry dates. Affected by Covid-19, the open outcry system "trading circle" that has been maintained for 144 years was suspended from March 2020 to September 2021. LME is currently the only exchange in Europe that retains this system.
Liquidity is concentrated in the so-called “Rings (trading circle) ”, open outcry remains the most efficient way to buy and sell multiple expiry dates. Affected by Covid-19, the open outcry system "trading circle" that has been maintained for 144 years was suspended from March 2020 to September 2021. LME is currently the only exchange in Europe that retains this system.
- Inter-office Telephone Market
Trading hours: 24-hour
Real-time bid and ask prices are provided 24 hours a day by LMElive (LME's market data service) and accredited data providers.
Real-time bid and ask prices are provided 24 hours a day by LMElive (LME's market data service) and accredited data providers.
Market Maker Mechanism
LME adopts a market-making system in the international phone trading market and in the circle trading market, and can choose to wait for a transaction at a fixed price and contract lot size (work to buy/sell); or ask the market maker for a fixed contract lot size Quote (quote market price), the bidder is called the Dealer, and the dealer representing the market maker will give a quote according to his position and views on the market.
Daily Delivery Mechanism
The LME is very different from COMEX market, the LME is not delivered on a monthly basis (each month has a fixed delivery date), but daily delivery (most dates that are not holidays can be delivery dates). When buying or selling a contract, the LME will confirm that the contract is a day after three months (holiday postponed).
At the same time, LME does not have a mechanism for opening and closing positions. For example, if you buy a lot of March copper on 1st March (the delivery date is 1st June), the contract due for delivery can be moved forward and backward through carry trade. So that the relevant buy and sell contracts will be hedged on the corresponding delivery date.
At the same time, LME does not have a mechanism for opening and closing positions. For example, if you buy a lot of March copper on 1st March (the delivery date is 1st June), the contract due for delivery can be moved forward and backward through carry trade. So that the relevant buy and sell contracts will be hedged on the corresponding delivery date.
Backwardation& Contango Mechanism
LME contracts have different delivery dates, and the spread between different delivery dates is called Backwardation& Contango. Changes in Backwardation& Contango vary according to market supply and demand, and there is no fixed pattern. For participants, the change in the price difference between Backwardation and Contango is a reference element of inter-period and cross-market arbitrage.(Backwardation/Contango).
Sino-Rich LME
Common trading varieties:
- Fast and stable online trading platform
- Customers can self-service trade on LMEselect and CME electronic platform
- Real-time display of LME and CME positions and interests in the same account
- Cooperate with arbitrage customers to provide programmatic trading ports
Exchange | Underlying metal | Contract Unit | Minimum Fluctuation | Prompt Dates | Last Trading Day | Trading Hours(HK Time) |
LME | LME Copper （LCA） | 25 tonnes | 0.5 per tonne=$12.5 | Daily: out to 3 months | Up until the close of the first Ring the day before the prompt date | 08:00 - 02:00 Next Day |
LME Aluminium | ||||||
| LME Zinc （LZS） | ||||||
LME Nickel | 6 tonnes | 5 per tonne=$30 | ||||
LME Lead | 25 tonnes | 0.5 per tonne=$12.5 | ||||
LME Tin | 5 tonnes | 5 per tonne=$25 |
*This time is converted from the local summer time. If the local winter time is implemented, please delay the time by one hour
Disclaimer: The information and materials contained in the website are compiled by Sino-Rich Securities, and we are committed to ensuring the information contained in this website is accurate at the time of publication (November 2021). It is not exhaustive and is for reference only. For updated information, please refer to the website of each Exchange.
Disclaimer: The information and materials contained in the website are compiled by Sino-Rich Securities, and we are committed to ensuring the information contained in this website is accurate at the time of publication (November 2021). It is not exhaustive and is for reference only. For updated information, please refer to the website of each Exchange.