Post by Sapphire Capital on Jul 12, 2008 22:55:01 GMT 4
LME Tin Futures & Traded Options
One of the two elements that shaped the Bronze Age, tin has played a major role in the development of civilisation as we know it. Today, tin’s primary use is in the form of tinplate, which accounts for over 30% of all tin consumed. The prolific growth of the electronic industry, has led to soldering being the second most important area of tin consumption.
Alongside copper, tin was the first metal to be traded on the LME from 1877. 1912 heralded the birth of the standard tin contract, which was suspended in 1985 following the tin crisis, and reintroduced in 1989. While the physical spot market is still centred in Kuala Lumpur, the LME contract has become the internationally accepted hedging tool, as it provides the forward reference price for the industry.
LME Tin Futures Contract Specification
Contract Tin of 99.85% minimum purity and conforming to BS3252:1986. Warrants issued after 1996 must conform to the chemical composition of BS EN 610:1996.
Lot size 5 tonnes (with a tolerance of +/-2%)
Form Ingots (Slabs will be referred to as ingots)
Weight 12 – 50 kg each. Each parcel on warrant shall be delivered in bundles not exceeding 1.2 tonnes.
On or after 29 March 2004, ingots to weigh not less than 12kgs or more than 30kgs.
Delivery dates Daily for 3 months forward and then every Wednesday for the next 3months and then every third Wednesday of the month for the next 9 months out to 15 months forward.
Quotation US dollars per tonne
Minimum price movement Ring - Outright $5.00, Carries $0.01
LME Select - Outright $1.00, Carries $0.01
Inter-office - Outright/Carries $0.01
Clearable currencies US dollar; Japanese yen; sterling; euro
LME Tin Options Contract Specification
Delivery dates Monthly from the first month out to 15 months
Value date The third Wednesday of the prompt month
Exercise date The first Wednesday of the prompt month
Premium quotation US dollars per tonne
Strike price * $25 gradations for strikes from US$25 to US$3975
$50 gradations for strikes form US$4000 to US$7950
$100 gradations for all strikes over $US8000
*Strike price gradations and tick size for premiums available in all clearable currencies.
LME Tin Traded Average Price Options Contract Specification
Contract date The business day on which the contract is traded
Contract period Calendar months up to 15, 27 or 63 months forward (in line with the underlying futures contracts). The inclusive period between the first business day and the last business day of the traded month.
Option type Calls & puts based on the monthly average settlement price (MASP)
Currency & strike price US dollars 1 gradations
Premium tick size 0.01 USD (one cent)
Premium payment Next business day after contract is traded
Settlement date Settlement is two business days after exercise
The futures trades settle as per LME rules & regulations.
Access the special contract rules for metals using the LME online rulebook.
The turnover of the LME tin contract increased by a factor of three between 1992 and 2001, as the metals industry moved to embrace the advantages offered by a contract that delivers the optimum combination of physical and risk management elements. To this end, the LME introduced traded average price options (TAPOs) contracts to enhance this industrial service.
To meet today’s demand for even clearer and more rapid information, The London Metal Exchange operates a comprehensive price-reporting system. The system enables vendors of LME prices to provide their clients throughout the world with up-to-the-minute reports, so maintaining a clear picture of activity at the hub of the international base metals market.
As a risk management mechanism, the LME tin contract offers transparency with the security of clearing, stability through regulation, and a 24 hour global trading structure that are the hallmarks of the world’s leading non-ferrous metal exchange.
LME contracts may only be offered or sold to United States foreign futures options customers by firms registered with the Commodity Futures Trading Commission (CFTC), or firms who are permitted to solicit and accept money from foreign futures and options customers for trading on the LME pursuant to CFTC Rule 30.10.
One of the two elements that shaped the Bronze Age, tin has played a major role in the development of civilisation as we know it. Today, tin’s primary use is in the form of tinplate, which accounts for over 30% of all tin consumed. The prolific growth of the electronic industry, has led to soldering being the second most important area of tin consumption.
Alongside copper, tin was the first metal to be traded on the LME from 1877. 1912 heralded the birth of the standard tin contract, which was suspended in 1985 following the tin crisis, and reintroduced in 1989. While the physical spot market is still centred in Kuala Lumpur, the LME contract has become the internationally accepted hedging tool, as it provides the forward reference price for the industry.
LME Tin Futures Contract Specification
Contract Tin of 99.85% minimum purity and conforming to BS3252:1986. Warrants issued after 1996 must conform to the chemical composition of BS EN 610:1996.
Lot size 5 tonnes (with a tolerance of +/-2%)
Form Ingots (Slabs will be referred to as ingots)
Weight 12 – 50 kg each. Each parcel on warrant shall be delivered in bundles not exceeding 1.2 tonnes.
On or after 29 March 2004, ingots to weigh not less than 12kgs or more than 30kgs.
Delivery dates Daily for 3 months forward and then every Wednesday for the next 3months and then every third Wednesday of the month for the next 9 months out to 15 months forward.
Quotation US dollars per tonne
Minimum price movement Ring - Outright $5.00, Carries $0.01
LME Select - Outright $1.00, Carries $0.01
Inter-office - Outright/Carries $0.01
Clearable currencies US dollar; Japanese yen; sterling; euro
LME Tin Options Contract Specification
Delivery dates Monthly from the first month out to 15 months
Value date The third Wednesday of the prompt month
Exercise date The first Wednesday of the prompt month
Premium quotation US dollars per tonne
Strike price * $25 gradations for strikes from US$25 to US$3975
$50 gradations for strikes form US$4000 to US$7950
$100 gradations for all strikes over $US8000
*Strike price gradations and tick size for premiums available in all clearable currencies.
LME Tin Traded Average Price Options Contract Specification
Contract date The business day on which the contract is traded
Contract period Calendar months up to 15, 27 or 63 months forward (in line with the underlying futures contracts). The inclusive period between the first business day and the last business day of the traded month.
Option type Calls & puts based on the monthly average settlement price (MASP)
Currency & strike price US dollars 1 gradations
Premium tick size 0.01 USD (one cent)
Premium payment Next business day after contract is traded
Settlement date Settlement is two business days after exercise
The futures trades settle as per LME rules & regulations.
Access the special contract rules for metals using the LME online rulebook.
The turnover of the LME tin contract increased by a factor of three between 1992 and 2001, as the metals industry moved to embrace the advantages offered by a contract that delivers the optimum combination of physical and risk management elements. To this end, the LME introduced traded average price options (TAPOs) contracts to enhance this industrial service.
To meet today’s demand for even clearer and more rapid information, The London Metal Exchange operates a comprehensive price-reporting system. The system enables vendors of LME prices to provide their clients throughout the world with up-to-the-minute reports, so maintaining a clear picture of activity at the hub of the international base metals market.
As a risk management mechanism, the LME tin contract offers transparency with the security of clearing, stability through regulation, and a 24 hour global trading structure that are the hallmarks of the world’s leading non-ferrous metal exchange.
LME contracts may only be offered or sold to United States foreign futures options customers by firms registered with the Commodity Futures Trading Commission (CFTC), or firms who are permitted to solicit and accept money from foreign futures and options customers for trading on the LME pursuant to CFTC Rule 30.10.