A word of Indian etymology meaning 100,000. This word is most commonly used when referring to silver, which is often traded in multiples of a lakh in the interdealer market.


This means lending metal to the market, or in other words, selling metal at a nearby date and simultaneously buying it back on a date further forward.

Limit Order

An order placed by a client to buy or sell at a specified price.


Closing out of a long position. It is also sometimes used to denote closing out of a short position, but this is more correctly referred to as covering or covering in.

London Bullion Market Association (LBMA)

The trade association representing the interests of the gold and silver market.

London Good Delivery

The specified criteria for good delivery status as defined by the LBMA. For gold, bars of acceptable delivery must be of a minimum fineness of 995.0 and a gold content of between 350 and 430 fine ounces with the bar weight expressed in multiples of 0.025 of an ounce - the smallest weight used in the market. Bars are generally close to 400 ounces or 12.5 kilograms.

For silver, bars of acceptable delivery must have a minimum fineness of 999 and a recommended weight between 750 and 1,100 ounces, although bars between 500 and 1,250 ounces will be accepted. Bars generally weigh around 1,000 ounces.

There are additional criteria specified for good delivery status that are set out in detail by the LBMA on their website.

London Platinum and Palladium Market (LPPM)

The trade association representing the interests of the platinum and palladium market.


An open purchased futures position. To go long' means starting a transaction by the purchase of a futures contract. Equally a producer or a processor may be long of physical metal if his supply of metal exceeds his sales orders.


The minimum amount of a commodity which can be traded on a futures market. At the LME a lot is often called a warrant or contract.

Margin Call

See Variation Margin.

Mark To Market

Evaluating an open position on the basis of current market price, usually to assess the need for a variation margin.

Market Order

An order to buy or sell a futures contract at the first obtainable price or prices on the market for the tonnage involved. If the order is given with discretion the broker may execute it over time as he sees fit; if without discretion he must hit every bid or offer as it appears until the order is filled.


A forward futures contract reaches maturity when its date becomes the prompt position.


An option strategy involving selling an option to fund the purchase of an opposite option. For instance, selling a put option to fund a call option. This is often undertaken as a zero cost Min Max, where the two premiums cancel each other out.


Abbreviation for North American Special Aluminium Alloy, which is traded on the London Metal Exchange.


A date or contract that is relatively close to the cash / spot / expiry date.


The New York Mercantile Exchange, on which Platinum and Palladium are traded on a monthly contract basis.


The price the seller asks for a commodity.

Open Interest

The total of all positions that have not yet been closed out on a futures market.

Open Outcry

The method of communication used by Ring Dealing Members at the LME, using shouting and hand signals. A broker announces to the entire ring his interest to buy or sell a commodity, the required delivery date and price. When another broker responds to accept the bid or offer and proposes a quantity, a deal is struck and that price becomes the latest traded price for that delivery date.

Open Position

A forward market position, which has not been closed out.


An option is a contract which gives the buyer the right but not the obligation for a specified period of time to buy from (Call) or sell to (Put) the grantor a specified quantity of metal at a specified strike price on a specified delivery date in return for payment of a negotiated premium.

Option Spread

The simultaneous purchase and sale of a pair of Call Options or Put Options, in the same metal but at different strike prices or different expiration dates, or both.

OTC (Over The Counter)

A bilateral deal between a broker or bank and his client. It is not an exchange-traded or cleared futures contract, but is subject to financial regulation in the country of the broker. Any trade which cannot be cleared is in effect an OTC trade.


Refers to a Call Option when its strike price is above the current market price, or a Put Option when its strike price is below the current market price.