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The LME's forward contracts allow producers, fabricators, merchants and consumers to insure against price risk. Today the Exchange trades in eight metals, two plastics and one index comprising the six primary base metals. The LME's eight metals contracts are: copper grade A, primary aluminium, standard lead, primary nickel, tin, special high grade zinc, aluminium alloy and North American Special Aluminium Alloy (NASAAC). The LME's plastics contracts are polypropylene (PP) and linear low density polyethylene (LL).
Unlike other commodity markets, which are usually based on monthly prompt dates, LME metal futures contracts run on a daily basis for a period of three months. The use of daily prompt dates is an important difference between the LME and other futures exchanges. It means the Exchange combines the convenience of settlement dates tailored to individual needs with the security of a clearing house for its clearing members.
After the 3-month date, the daily prompts for forward trading are reduced to weekly and then monthly contracts out to 15, 27 or 63 months forward.
Find out more about futures contracts
The LME also offers traded options contracts based on each of these futures contracts, together with traded average price options contracts (TAPOs) based on the monthly average settlement price (MASP) for all metals futures contracts.
Find out more about LME traded options
Find out more about LME traded average price options contracts (TAPOs)
All LME prices are quoted in US Dollars, but the LME permits contracts in sterling, Japanese yen, and Euros and provides official exchange rates from US Dollars for each of them.
Trade is conducted in lots rather than tonnes, with each lot of aluminium, copper, lead and zinc amounting to 25 tonnes. Nickel is traded in 6 tonne lots, tin in 5 tonnes and aluminium alloy and NASAAC in 20 tonne lots. PP and LL are traded in 24.75 tonne lots.
The contract for each metal sets out the shapes, weights and methods of strapping (metals) and packaging (plastics). The contract specifications are for the quality and shape which are most widely traded and demanded by industry.
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