The London Metal Exchange (LME) is the futures exchange with the world's largest market in options and
 futures contracts on base and other metals. As the LME offers contracts with daily expiry dates of up
 to three months from trade date, weekly contracts to six months, and monthly contracts up to 123 months
,[2] it also allows for cash trading. It offers hedging, worldwide reference pricing, and the option of
physical delivery to settle contracts. In July 2012, LME's shareholders voted to sell the exchange to
Hong Kong Exchanges and Clearing for £1.4 billion.It is located at 10 Finsbury Square in the London Borough
 of Islington, just to the north of the City of London.[3]

The London Metal Market and Exchange Company was founded in 1877, but the market traces its origins back to 1571
 and the opening of the Royal Exchange, London. Before the exchange was created, business was conducted by traders
 in London coffee houses using a makeshift ring drawn in chalk on the floor.[4]At first only copper was traded.
 Lead and zinc were soon added but only gained official trading status in 1920. The exchange was closed during World
 War II and did not re-open until 1954.[5] The range of metals traded was extended to include aluminium (1978), nickel
 (1979), tin (1989), aluminium alloy (1992), steel (2008), and minor metals cobalt and molybdenum (2010). The exchange
ceased trading plastics in 2011. The total value of the trade is around $US 11.6 trillion annually.[6]
Many deals are made for commodities to be delivered in three months' time. The custom stems from the time that
copper cargoes originally took in 1877 on their voyage from the ports of Chile.[4]
Trading Times: 11:40 — 17:00, London Time

Open-outcry is the oldest way of trading on the exchange, though nowadays the majority of trades are placed electronically.
[7] It is central to the process of price discovery, the way LME official prices are established. Prices are derived from
the most liquid periods of trading; the short open-outcry ring trading sessions, and are most representative of industry
supply and demand. The official settlement price, on which contracts are settled, is determined by the last offer price
 before the bell is sounded to mark the end of the official ring.

There is constant inter-office trading, a relatively small yet important portion of trading is still done by open-outcry in the Ring.
 There are a morning and an afternoon trade, where each of the nine metal contracts are traded in two blocks with a five-minute session
 for each contract (the sessions last from 11.40 until 13.10 and from 14.55 until 16.15, each session includes a 10-minute break).
 The second trading block in the morning is key to setting the Daily Official Exchange rates. After the official trades of sessions
 one and two, there are 85 and 45 minutes of "kerb" trading respectively. Trades are in futures, options and TAPOs
 (traded average-price options, a form of Asian options).

Whilst the price discovery mechanism used by the exchange is post-trade transparent it is not pre-trade transparent.
 Pre-trade transparency is required for many securities under the Market in Financial Instruments Directive (MiFiD)
to achieve fair markets by reducing such illegal abuse as market manipulation.
The LME is the last exchange in Europe where open-outcry trading takes place.[4]
Electronic trading

The LME launched an electronic platform called LME Select launched in February 2001.[5] This was developed by a Swedish
software house called Cinnober. The platform is a FIX-based trading platform, and now handles a majority of the total LME business.
Delivery points

As a market of “last resort”, industry can use the LME’s delivery option to sell excess stock in times of oversupply and as a source
of material in times of extreme shortage. In reality, physical delivery occurs in a very small percentage of cases on the LME as most
organizations use the LME for hedging purposes. The small percentage which does result in delivery, however, plays a vital role in creating price convergence.
To support this mechanism, the LME approves and licenses a network of warehouses and storage facilities around the world.
 Controversy arose in 2013 because the LME took action to limit the use of its warehouses for the hoarding of aluminum.
 In March 2014, England's High Court found for Rusal, the huge Russian aluminum company, striking down these rules.