A process for purifying metals such as copper or aluminium. It involves a direct current passing from one electrode (the anode) through a liquid electrolyte to another electrode (the cathode) in a cell. The passage of ions from the anode causes the pure metal only to be electrodeposited on the cathode.

European Option

An option which in practice is only declared on the expiration date because the underlying metal can only be acquired at that time. The LME option contract, which in theory can be declared at any time prior to expiration, is effectively a European Option because there is no economic benefit to early declaration.

Expiration Date

The date at which the buyer's rights under an option contract expire if they have not been declared.


The purchase or sale of metal for delivery at a specified future date.

FCA (Financial Conduct Authority)

An independent body which regulates the financial services industry in the UK.

Futures Contract

A contract to buy or sell a metal on a certain date in the future at a specified price.


A give-up occurs when a client instructs an executing LME broker to give up an uncleared contract to another of his LME brokers for the purpose of being entered into clearing and eventually settled.

Good Till Cancelled Order (GTC)

An order to buy or sell which is valid every market day until it is executed or cancelled by the client.


The person or firm that sells an option.


The establishment of a position on a futures market, or by means of options, to reduce or cancel out the risk of another position.

In Warehouse

Title to metal sold under LME contracts passes with delivery of the warehouse warrant. LME prices therefore refer to metal lying in LME warehouse.


Refers to a Put Option when its strike price is above the current market price, or a Call Option when its strike price is below the current market price. The more in-the-money an option is, the higher the premium.

Initial Margin

The initial outlay of money required to open a futures position. The size of this deposit varies from metal to metal, but is usually a fixed amount, set by the Clearing House, representing a small percentage (around 5%) of the value of the contract.

Introducing Broker

An individual who introduces a client to a clearing member of the LME.