London Metal Exchange - LME

DEFINITION of 'London Metal Exchange - LME'

A commodities exchange in London, England, that deals in metal futures. Contracts on the exchange include aluminum, copper and zinc. Trading on the LME can be done in three main ways: through open outcry, a telephone system between member companies or the LME Select, an electronic trading platform. The LME is a non-ferrous exchange, which means that iron and steel are not traded on the exchange.

BREAKING DOWN 'London Metal Exchange - LME'

The LME is one of the main metal markets in the world and allows for the hedging of metals risk through highly liquid and standardized exchange-traded futures contracts. The LME also trades plastics on its exchange and has an LME index option that allows traders to speculate or hedge the broader metals market as a whole.

RELATED TERMS
  1. Precious Metals

    A classification of metals that are considered to be rare and/or ...
  2. Floor Trader - FT

    An exchange member who executes transactions from the floor of ...
  3. Futures Exchange

    Traditionally, a term referring to a central marketplace where ...
  4. Against Actual

    An order between two traders looking to hedge their positions, ...
  5. Currency Exchange

    A business that allows customers to exchange one currency for ...
  6. Long Hedge

    A situation where an investor has to take a long position in ...
Related Articles
  1. Investing News

    Should You Add Metals To Your Portfolio? (SLV, GLD)

    This study examines how various metals have performed over the last 10+ years, with analysis of whether you should consider investing in metals.
  2. Chart Advisor

    Industrial Metals Are Stuck In A Downtrend

    Weakness in China has sparked concern that the downward pressure will continue to dominate the trends of the industrial metals. We'll take a look at several charts to see where they are headed ...
  3. Investing Basics

    The Copper King: An Empire Built On Manipulation

    Find out how Yasuo Hamanaka's actions in the copper market forever changed the rules for commodity traders.
  4. Chart Advisor

    Base Metals Continue To Struggle

    Strong downtrends on several key charts suggests the base metals sector is headed lower. We'll take a look at some ways to trade the move.
  5. Chart Advisor

    Now Is The Time To Buy Metals (DBB, DPS)

    Increased volatility and aggressive monetary policy decisions in Europe have active traders turning to metals and other hard assets for protection.
  6. Stock Analysis

    Use Aluminum To Play Rising Industrial Growth

    As both industrial production and economic growth returns, aluminum could be the best way to play that surge.
  7. Trading Strategies

    Commodities Outlook For The Remainder Of 2012: Base Metals

    Steel is iron alloyed with other compounds like carbon. It is the most widely produced metal in the world. This industry is dominated by China. At one time the U.S. was the top producer, but ...
  8. Chart Advisor

    Interested in Metals? Start With This ETF (DBB)

    Base metals have seen much selling pressure since notching a swing higher early in the summer. Here's a look.
  9. Stock Analysis

    The Other Metal Superstars

    Gold has captured the spotlight within the commodities world, but investors would do well to consider the entire metal spectrum.
  10. Investing Basics

    What's an Exchange?

    An exchange is an organized marketplace where securities and other financial instruments are traded.
RELATED FAQS
  1. How much does China's growth affect the price of industrial metals?

    Find out why the health of the Chinese economy is such an important variable for the prices of industrial metals, such as ... Read Answer >>
  2. Who is Mr. Copper?

    A sense of mystery still surrounds Yasuo Hamanaka, a.k.a. Mr. Copper, and the magnitude of his losses. From his perch at ... Read Answer >>
  3. How can I profit from a fall in the metals and mining sector?

    Learn the methods that shrewd investors use to profit from a fall in the metals and mining sector. These methods include ... Read Answer >>
  4. What is the history of futures?

    Explore the history of futures trading and the origin of the major commodity futures trading exchanges in England and the ... Read Answer >>
  5. What part of the economic cycle is best for investing in the metals and mining sector?

    Consider the pattern of growth and loss in the metals and mining sector, and find out why it can be challenging to correlate ... Read Answer >>
  6. What countries represent the largest portion of the global metals and mining sector ...

    Learn which countries have the largest mining production in the world and how precious metals are a significant source of ... Read Answer >>
Hot Definitions
  1. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  2. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  3. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  4. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  5. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  6. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
Trading Center