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.
LME futures are unique and designed to mirror physical trading. Its 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.
Futures positions 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 use of daily prompt dates is an important difference between the LME and other futures exchanges. Designed to mirror physical trading, daily prompts enable users to accurately hedge their physical transactions down to the day.
The LME has futures contracts that trade daily out to three months forward, weekly up to six months and monthly up to 123 months in the future, depending on the underlying metal.
Weekly prompt dates usually fall on a Wednesday while monthly prompt dates are normally the third Wednesday of the month. Where these are altered due to bank or public holidays or other non-tradable dates an LME notice will be issued to provide a substitute prompt date and are noted on the trading calendar.
LMEselect is the LME’s electronic platform for the trading of all LME contracts. Available from 01.00 to 19.00, it offers a range of advanced features all tailored to the LME’s unique prompt date structure.
The platform integrates with member trading platforms via a FIX API either from member sites or via proximity hosted data centres for the lowest latency trading strategies.
A stand-alone ‘GUI’ is also available for low-volume trading or as a management console.
LMEselect’s unique ‘high-availability’ design ensures real-time data integrity across two data centres. Members access the full range of LME trading services from their own information systems via secure high-speed networks.
LME Clients access LMEselect via member systems or member-sponsored ISV platforms. In the case of member systems, client traffic must pass through a member order-routing bridge and/or a pre-trade risk engine fully controlled by the sponsoring member’s compliance team.
Client traffic can also pass through an ISV pre-trade risk engine endorsed and controlled by the sponsoring member’s compliance team.
Kingdom Futures offers its clients a choice of different third partyelectronic order routing platforms that feed directly into LMESelect .