Few people know that the London Metal Exchange is the world's largest markets for futures and options contracts in which metals are the underlying assets.Despite the fact that the masses it is not too well known, the financial community, the powerful mining industry enterprises and large commodity traders are very respected and valued the institution.
This London Stock Exchange allows us to conclude contracts for a period of 3 to 123 months from the start of trading.You can use it to make hedging and trading options on real supply and hedge risks.
London Metal Exchange has a long history and works since 1877.Initially, it sold only on the zinc, lead and copper.In 1978, this list was included aluminum, a year later was added nickel.Then, among the available metals were tin (1989), aluminum alloy (1992), steel (2008), molybdenum and cobalt (2010).The total annual trading volume is approximately equal to 11.6 trillion dollars.
oldest and most popular way of conducting transactions considered to be an open voice auction.This central unit pricing.Formation of the cost of going for the most liquid periods in a small circle of participants in the auction via the voice exchange between the major representatives of consumers and producers.Last price buyers voiced to signal the end of trading, it becomes the official closing price for contracts.
London Metal Exchange is open throughout the morning and afternoon trading session.During each of these metals is a trade-nine two blocks of 5 minutes to a contract.The morning session begins at 11:40 and lasts until 13:10, and the daily - from 14:55 to 16:15.Both have a ten-minute break.The most important is the pricing for 2nd morning block.Once completed the first and second trading session begins OTC trades lasting 45 and 85 minutes.Traded options, futures and options TAROT.
Precious metals, contrary to popular belief, are not included in the list of products offered by the London Metal Exchange.Gold and silver are sold on the OTC market of the London bullion, while platinum and palladium has a separate market.
As a rule, the physical delivery of metal does not take place, since many organizations are contracted to hedge risks.However, that small portion of contracts, which actually leads to delivery, is very important, as is taking part in a price convergence.
London Metal Exchange licenses and expanding the network of storage facilities and warehouses around the world.Storage companies must verify compliance rather stringent criteria for obtaining a license.
Through trading activities of the stock exchange, at the large industrial enterprises have the ability to foresee the rapid and significant price movements.In addition, it helps to determine the future value of metals for many months ahead.Due to the high liquidity, the price of the stock exchange recognized by all consumers and producers of metals in every corner of the world.