tas - Trade at settlement

The London Metal Exchange (LME) introduced trade-at-settlement (TAS) functionality on LMEselect for 3-month LME Nickel Closing Prices on 18 February 2019.

TAS factsheet. 

Participants can use a TAS order book on LMEselect to enter an order to buy or sell a contract (during the course of the trading day) at a price that is equal to, or a number of ticks above or below, the yet to be established 3-month Closing Price.

Once the Closing Price is discovered, the TAS order delivers the underlying 3-month contract at the Closing Price, plus or minus the traded TAS price.

Participants wishing to “trade at the close” (i.e. buy or sell at the LME Closing Price), usually do so via the Ring or using price code trades in the inter office market. TAS enables participants to display interests and trade (at the closing price) on the central limit order book.

“Trade at settlement” is so called because TAS functionality on other markets allows participants to trade the unknown “settlement price” - the price which determines daily margin. On the LME the price used to determine daily margin, discovered after 16.30, is known as the “Closing Price”, not the “settlement price”

The “LME Official Settlement Price”, discovered between 12.30 and 13.15 on the Ring, on the other hand, is used as a reference price in physical deals.