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.

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