In this section

In this section

Period Pricing
A contract for physical metal supply over a period (usually a year) in which all elements except price are settled in advance.
Premarket
Trading over the telephone between brokers before the LME opens for ring dealing.
Premium
There are four possible definitions for the word 'premium'.
Prompt
For immediate (two day) delivery.
Prompt Date
The date on which a metal has to be delivered to fulfil the contract terms.
Put Option
An option which gives the buyer the right, but not the obligation, to sell a particular futures contract at a specific strike price for a specific expiration.
RIE
The acronym for Recognised Investment Exchange as defined in the 1986 Financial Services Act.
Ring
This can mean either the five-minute trading period in a single metal on the LME or the circle of seats where the dealing takes place.
Ring Dealing Member
An organisation which is a full clearing member of the LME and entitled to deal in the Ring.
Roll
To transfer a market position in futures or options to another by a simultaneous purchase and sale.
Session
This refers to the morning and afternoon trading sessions at the LME.
Settlement Price
The last unfulfilled offer to sell cash at the close of the second morning ring in each metal i.e. the cash seller's price at that close.
Short
An open sold position on a futures market.
Spot Market
The market for delivery of metal and currency two business days after the transaction date.
Spot Month
The first deliverable month for which a quotation is available on a futures market.
Stop-Loss Order
An order which becomes a market order to buy only if the market advances to a specified level, or to sell only if the market declines to a specified level.
Straddle
The simultaneous purchase or sale of Put and Call Options at the same strike price with the same prompt.
Strangle
The simultaneous sale (or purchase) of out-of-the-money calls and out-of-the-money puts for the same date.
Strike Price
A series of contractually binding price levels at which an option may be struck.
Swap
An agreement between a hedger and a broker or bank to swap a series of forward cash flows based on selling and buying at an agreed pair of prices.
Switching
Can refer to the exchange of metal in one warehouse for that in another or the movement out of one futures contract into another, usually further forward.