Options discussion paper

The London Metal Exchange (LME) issued a market-wide discussion paper on plans to simplify and standardise some areas of its options market structure in order to support the development of its electronic options market.

The discussion paper process closed on 29 July 2020. The feedback we've received will now be assessed and next steps announced in due course.

We sought the views on a number of areas, including:

  • the options expiry process
  • strike listing rules
  • tick sizes
  • and the closing-price process

We were also keen to hear views from the market on broader topics such as liquidity provider programmes and block rules, as well as on the potential introduction of new options contracts.

In order to broaden participation in its electronic options market, the LME proposes to move from a “volatility quoted format” to a “premium quoted format” – both in order to be aligned to the industry standard and to offer an increased level of transparency.

The plans follow extensive engagement with the Traded Options Committee and are in response to market demand.

Press release: LME issues discussion paper on development of electronic options market