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Options

An option is the right, but not the obligation, to buy or sell a futures contract at a price (the strike price) agreed today.

They give hedgers and investors a more flexible alternative to futures. When buying an option the purchaser is not entering into a firm obligation - they are simply buying a choice of action.

The American-style options trade monthly up to 63 months.

Options Strike Price Gradations

Ref Title
08/387 LME Traded Options Volatilities
08/199 Amended Options Strike Price Gradations

Want to learn more?

Register for our Hedging with Options training course to learn more about the basics of hedging on the LME. The course looks at market terminology, trading strategies and margining of LME contracts.