citations for verification . please help improve this article by adding citations to reliable sources . unsourced material may be challenged and removed . february 2015 learn how and when to remove this template message london metal exchange type commodities exchange location london united kingdom founded 1877 ; 139 years ago 1877 owner hong kong exchanges and clearing lme holdings limited currency united states dollar volume 159.7 million lots ; 3.7 billion tonnes ; 14.5 trillion 2012 1 website www.lme.com the london metal exchange lme is the futures exchange with the world s largest market in options and futures contracts on base and other metals . as the lme offers contracts with daily expiry dates of up to three months from trade date weekly contracts to six months and monthly contracts up to 123 months 2 it also allows for cash trading . it offers hedging worldwide reference pricing and the option of physical delivery to settle contracts . in july 2012 lme s shareholders voted to sell the exchange to hong kong exchanges and clearing for 1.4 billion . it is located at 10 finsbury square in the london borough of islington just to the north of the city of london . 3 contents 1 history 2 commodities traded 3 facilities 4 ring trading 5 ring dealing members 6 precious metals 7 electronic trading 8 delivery points 9 warehouses 10 see also 11 references 12 external links history edit the london metal market and exchange company was founded in 1877 but the market traces its origins back to 1571 and the opening of the royal exchange london . before the exchange was created business was conducted by traders in london coffee houses using a makeshift ring drawn in chalk on the floor . 4 at first only copper was traded . lead and zinc were soon added but only gained official trading status in 1920 . the exchange was closed during world war ii and did not re open until 1954 . 5 the range of metals traded was extended to include aluminium 1978 nickel 1979 tin 1989 aluminium alloy 1992 steel 2008 and minor metals cobalt and molybdenum 2010 . the exchange ceased trading plastics in 2011 . the total value of the trade is around us 11.6 trillion annually . 6 many deals are made for commodities to be delivered in three months time . the custom stems from the time that copper cargoes originally took in 1877 on their voyage from the ports of chile . 4 commodities traded edit the lme offers futures and options contracts for aluminium aluminium alloy nasaac north american special aluminium alloy cobalt copper lead molybdenum nickel steel billet steel rebar steel scrap tin and zinc . facilities edit main entrance to the former premises of the lme at 56 leadenhall street in the city of london to trade contracts in copper tin or any other metal listed on the lme one has to trade through an lme member . purchasers of contracts which are then left to reach maturity will receive a warrant for a specific lme approved warehouse to take delivery of the metal if required . the lme issues each day detailed figures on how many tonnes of each metal is in its warehouses which helps producers and consumers make correct business decisions . ring trading edit trading times 11 40 17 00 london time open outcry is the oldest way of trading on the exchange though nowadays the majority of trades are placed electronically . 7 it is central to the process of price discovery the way lme official prices are established . prices are derived from the most liquid periods of trading ; the short open outcry ring trading sessions and are most representative of industry supply and demand . the official settlement price on which contracts are settled is determined by the last offer price before the bell is sounded to mark the end of the official ring . there is constant inter office trading a relatively small yet important portion of trading is still done by open outcry in the ring . there are a morning and an afternoon trade where each of the nine metal contracts are traded in two blocks with a five minute session for each contract the sessions last from 11.40 until 13.10 and from 14.55 until 16.15 each session includes a 10 minute break . the second trading block in the morning is key to setting the daily official exchange rates . after the official trades of sessions one and two there are 85 and 45 minutes of kerb trading respectively . trades are in futures options and tapos traded average price options a form of asian options . whilst the price discovery mechanism used by the exchange is post trade transparent it is not pre trade transparent . pre trade transparency is required for many securities under the market in financial instruments directive mifid to achieve fair markets by reducing such illegal abuse as market manipulation . the lme is the last exchange in europe where open outcry trading takes place . 4 ring dealing members edit ring dealing members are entitled to trade in the ring during the ring trading sessions . 8 they may also operate a 24 hour market by trading inter office . all ring dealing members as members of the london clearing house are authorised under the financial services and markets act 2000 and are regulated by the financial conduct authority . each metal is traded in its own five minute period . there are two sessions every trading day for each metal . ring dealing members are clearing members who hold the exclusive right to trade in the ring ; 9 amalgamated metal trading limited e d & f man capital markets limited marex financial ltd metdist trading ltd intl fcstone europe ltd gf financial markets uk ltd soci t g n rale newedge uk ltd sucden financial ltd triland metals ltd in addition to the 9 companies who have exclusive rights to trade in the ring around 100 companies are involved in the lme in total . precious metals edit contrary to popular belief the precious metals gold and silver are not traded on the london metal exchange but on the over the counter market usually referred to as the london bullion market by the members of the london bullion market association . platinum and palladium are traded on the london platinum and palladium market . both members of the lbma and lppm trade the precious metals spot market on ebs electronic broking systems acquired by icap in june 2006 . many companies involved in minor metals are members of the minor metal trade association . the lme used 10 however to provide trade matching and clearing services to the london bullion market and distributes gold silver and gold irs interest rate swaps forward rates on behalf of the lbma . electronic trading edit the lme launched an electronic platform called lme select launched in february 2001 . 5 this was developed by a swedish software house called cinnober . the platform is a fix based trading platform and now handles a majority of the total lme business . delivery points edit as a market of last resort industry can use the lme s delivery option to sell excess stock in times of oversupply and as a source of material in times of extreme shortage . in reality physical delivery occurs in a very small percentage of cases on the lme as most organizations use the lme for hedging purposes . the small percentage which does result in delivery however plays a vital role in creating price convergence . warehouses edit to support this mechanism the lme approves and licenses a network of warehouses and storage facilities around the world . controversy arose in 2013 because the lme took action to limit the use of its warehouses for the hoarding of aluminum . in march 2014 england s high court found for rusal the huge russian aluminum company striking down these rules . see also edit list of futures exchanges london platinum and palladium market references edit about the lme futures contract specifications . london metal exchange . retrieved 7 august 2015 . london metal exchange offices . www.lme.com . retrieved 28 january 2016 . a b c bbc radio 4 today broadcast 25 october 2011 . northedge richard 2007 . 130 years of the lme pdf . lme 130th anniversary supplement . newsdesk communications . archived from the original pdf on 31 october 2014 . retrieved 31 october 2014 . lme achieves another year of record volume . london metal exchange . 5 january 2009 . retrieved 29 july 2009 . lme select . london metal exchange . retrieved 7 august 2015 . category 1 ring dealing . london metal exchange . retrieved 29 july 2009 . ring dealing members . london metal exchange . retrieved 7 august 2015 . https www.lme.com media files notices 2014 2014 09 14 % 20269 % 20a261 % 20precious % 20metals % 20price % 20data % 20and % 20matching % 20and % 20clearing % 20services.pdf external links edit lme lme ring dealing members london bullion market association london platinum and palladium market platts metals prices assessments v t e economy of the united kingdom companies co operatives employee owned companies ftse 100 index ftse 250 index ftse fledgling index ftse smallcap index government owned companies currency governance regulation bank of england governor of the bank of england budget company law competition commission department for business innovation and skills financial conduct authority gilts hm revenue and customs hm treasury chancellor of the exchequer debt management office monetary policy committee office for budget responsibility office of fair trading pound sterling banknotes coinage taxation uk statistics authority uk trade & investment history chronological 1659 1849 navigation acts agricultural revolution industrial revolution panic of 1796 97 1815 46 corn laws new imperialism 1830s 1945 second industrial revolution 1860s 1914 1873 79 long depression 1926 general strike 1929 39 great depression 1948 52 marshall plan 1974 three day week 1979 winter of discontent 1986 big bang 1992 black wednesday late 2000s recession 2008 bank rescue package 2009 bank rescue package recurrent economic geography free trade gold standard recessions and recoveries national 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institute of directors uk payments administration ukpa category commons coordinates 51 30 47.5 n 0 4 45 w 51.513194 n 0.07917 w 51.513194 ;