Glossary

Definition of the main terms used in the sale of metals

Arbitrage

Trading the differential between two markets simultaneously

Backwardation

Cash price higher than forward price

Bear, bearish, baissier

A market participant expecting lower prices

Borrow

Purchase cash - sale forward date

Brand

Trademark of specific producer

Bull, bullish, haussier

A market participant expecting rising prices

Chart

Graph of price movements

Clearing House

Clearing institution for all LME transactions

Comex

Commodity Exchange New York

Contango

Cash price lower than forward price

Hedge

Protection of purchases and sales against price movements

Lend

Sale cash - purchase forward date

LME

London Metal Exchange

Option

The right or obligation to buy or sell a commodity on a specific date at a specific price

Pre market

Trading of metals in the morning prior to the ring

Ring

Period of 5 minutes in which a metal is traded at the LME and a settlement quotation is fixed

Settlement

Daily published official quotation for metals

Squeeze

Artificial commodity shortage

Stock

Exchange warehouse stocks published by the LME every day for specific metals

Warrant

Warehouse certificate, document of ownership