Introduction to LME
The London Metal Exchange (LME) is the major international market for the main industriallyused non-ferrous metals, namely aluminium, aluminium alloy, copper, lead, nickel, tin, zinc, andsilver. It is used worldwide by producers and consumers of nonferrous metals as a centre forspot
and options trading in these metals. The results for the spot and futures prices mayerve as guidelines for allocation and hedge
strategies involving several metal markets atdifferent time horizons across the world.
– A market of commodities or securities in which goods are sold for ready cash and deliveredimmediately i.e transactions take place on the spot. Also known as the Cash Market since cash changeshands.
– A contract to exchange specific quantities of a commodity, not today, but at a specified datein the future, at a price that is agreed upon today.
A transaction intended to protect or reduce risk from subsequent adverse price movementsof a physical commodity already bought or sold.