Overview
As set out in the LME Notice 26/064 and LME Clear Circular 26/013 (Decision Notice), the LME will introduce an automated expiry process for all metal options, with a single day cut-over implementation approach. The implementation date and time will be 21 September 2026, at 01.30 (London time).
At the same time, all metal options will move from American to European style.
Metal options will expire automatically on the first Wednesday of the contract month, based on the Month 1 (M1) Closing Price for the relevant metal. These changes align LME metal options with market standard practice and provide greater certainty, transparency and operational efficiency for members and clients.
How automated expiry works
Expiry date and price
- Metal options expire on the first Wednesday of the contract month.
- Expiry is determined using the M1 Closing Price for the relevant metal on that day.
- The M1 Closing Price is calculated using a volume-weighted average price (VWAP) during the Closing Price window.
Timings on expiry day (GMT)
- Closing Price window is between 16:00 and 17:00 (metal‑specific VWAP windows)
- Publication of final M1 Closing Price: approximately 17:50
- Option expiry: once the final M1 Closing Price is recorded
- Processing of resulting futures positions: around 18:50
Exercise and abandon logic
At expiry, options are processed automatically as follows:
Call options
- In the money (ITM): exercised
- At the money (ATM): exercised
- Out of the money (OTM): abandoned
Put options
- ITM: exercised
- ATM: abandoned
- OTM: abandoned
This approach is consistent with industry standard convention and provides a deterministic outcome at expiry.
ATM definition
The LME Rules define an ATM option such that the Option Exercise Reference Price is equal to the strike price. For the full definition please refer to the LME Rulebook.
A metal option will be considered to be ATM only where it is exactly equal to the Exercise Reference Price, to two decimal places.
Use of the M1 Closing Price
- The M1 Closing Price is used as published and is not rounded for the purposes of determining whether an option is ITM, ATM or OTM.
- Rounding the price would change the expiry outcome and is therefore not applied.
Call option example
| M1 Closing Price | Outcome |
|---|---|
| 13,499.99 | Abandoned (OTM) |
| 13,500.00 | Exercised (ATM) |
| 13,500.01 | Exercised (ITM) |
Put option example
| M1 Closing Price | Outcome |
|---|---|
| 13,500.01 | Abandoned (OTM) |
| 13,500.00 | Abandoned (ATM) |
| 13,499.99 | Exercised (ITM) |
Additional points to note:
- Metal options will expire based on the Closing Price window on expiry day.
- Trading on expiry day will not initially be permitted; the last trading day remains unchanged.
- Contrary instructions (contras) will not be allowed.
- All metal options will transition using a single cut-over approach rather than parallel contract sets.
This is a summary of the changes only and should be read in conjunction with LME Notice 26/064 and LME Clear Circular 26/013, which contain the full detail of the Decision Notice.