London Metal Exchange (LME)

Submitted by Jim Thesiger on 10 September, 2010 - 16:28

The London Metal Exchange (in short LME) is known as the premier non-ferrous metals market of the world which offers options and future contracts for various types of metals including aluminium, copper, lead, tin and zinc. In addition to this, it offers two regional aluminium alloy contracts as well. The exchange has started trading plastic during 2005. It is to be mentioned that, iron and steel are not traded at LME since it is a non-ferrous exchange.

Investing at London Metal Exchange: Different Trading Methods

The investors can execute their trades at the London Metal Exchange mainly in three ways:

  • Through a telephone system between the member companies
  • By using a electronic trading platform and,
  • Through open outcry

If you are interested about following the price of the base metals, then LME is the place where you should focus on as it is the best place that will serve the purpose for you. As much as $2 trillion worth of trade contracts are managed by this exchange at a yearly basis, making it the largest non-ferrous metal market of the globe.

Speculating Market with LME Charts

The London Metal Exchange usually publishes inventory charts on the base metals for 3 to 27 months. This can be a useful gauge for what hedgers and speculators are thinking. Say for example, if the value of the base metal is experiencing a lower price in comparison with the cash price for about 3 months or so, then the question may arise whether it is headed towards price fall.

Glossary List