What are LME futures and options?

Find out more about how the LME's futures and options contracts work.

 

Futures

LME futures provide members of the metal and investment communities with the unparalleled opportunity to transfer and take on price risk.

A futures contract is the obligation to buy or sell a standard quantity of a specified asset (metal) on a set date, at a fixed price agreed today.

Unique

Our futures are unique and designed to mirror physical trading. Our prompt date structure enables participants to buy and sell futures daily out to three months, weekly out to six months and monthly up to ten years.

Settlement and clearing

Futures that are not ‘closed out’ by an opposite sale or purchase are physically settled. All LME futures are settled on the prompt date with initial and variation margins called during the term of a contract.

The LME is a wholesale market offering products designed for institutional investors and for those wishing to hedge their exposure to fluctuations in metals prices. The LME is subject to the obligations of the Packaged Retail and Insurance-Based Investment Products Regulations and has prepared Key Information Documents in relation to its Futures and Options contracts.