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Options contract specifications

Options contracts give the buyer of the contract the right but not the obligation to buy (call option) or sell (put option) a futures contract at a set price. The buyer pays a premium for this right.

LME Copper options

Contract code CA
Underlying metal

Grade A copper

Lot size 25 tonnes
Contract months Monthly out to 63 months
Underlying contract LME Copper futures - third Wednesday prompt of the contract month
Price quotation US dollars per tonne
Clearable currencies US dollar, Japanese yen, sterling, euro
Option style American
Trading deadlines

Tuesday before the first Wednesday of the prompt month:

  • Last trading time - by 18.00
  • Last matching and registration - by 18.15
Declaration date/time

Any LME business day up to and including the first Wednesday of the expiring option month, from 08.00 up to:

  • 11.15 for clearing members
  • 11.10 for clients
Minimum price fluctuation (tick size) $0.01 per tonne
Strike price intervals
  • $25 - for strikes from $25 to $9,975
  • $50 - for strikes from $10,000 to $19,950
  • $100 - for all strikes over $20,000
Exercise of option

Option exercise is a manual process.

 

LCH.Clearnet auto-exercise in the money options that are greater than two strikes above and two strikes below the at-the-money strikes, as determined by the end of day valuation price of the relevant third Wednesday prompt of the contract month, on the evening before the first Wednesday expiry day. There is manual exercise for the remaining close-to-the-money options. Options exercise will result in a third Wednesday futures contract

Payment terms One business day following the trade day
Settlement type Physical
Trading venues Ring, inter-office telephone and LMEselect (as a hedged option only)

All contracts subject to LME rules and regulations and LCH.Clearnet SPAN margining.

LME Copper contract specifications

Law / Regulation
English Law, with regulation by the LME and the Financial Services Authority (FSA). This is a summary of the contract specifications. For full contract specification details, please refer to the LME Rulebook which details the complete rules and regulations of LME contracts.

LME contracts may only be offered or sold to United States foreign futures and options customers by firms registered with the Commodity Futures Trading Commission (CFTC), or firms who are permitted to solicit and accept money from foreign futures and options customers from trading on the LME pursuant to CFTC Rule 30.10.

Arbitration
In the case of unresolved disputes, arbitration is effected via the LME arbitration procedure, and/or by other body agreed by the parties.