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LME Traded Average Price Options (TAPOs) for copper, aluminium, lead, nickel, zinc, aluminium alloy, NASAAC and tin are Exchange-cleared contracts based on the LME Monthly Average Settlement Price (MASP).
Because many users in the industry price their physical material on the basis of the LME MASP, brokers developed off-Exchange average price option products, known as 'Asians' which quickly became popular, particularly with large producers. To meet this growing demand, the LME developed the TAPO contracts.
TAPO contracts complement existing LME futures and traded options contracts. Users of the market who trade basis the MASP will tend to use TAPO contracts. However, hedgers who trade using the LME's flexible daily prompt system will find futures or traded options more suitable hedging tools.
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