The floor was closed in March 2020 for the first time since World War II to allow for the social distancing needed to deal with Covid-19, silencing its red ring of seats and the theatre of arcane hand signals and frenzied shouting by traders.
In January, the world’s oldest and biggest marketplace for industrial metals launched a consultation process on closing Europe’s last open-outcry trading floor, arguing that the forced migration to digital trading was a success.
The LME also proposed in its consultation paper switching the methodology for calculating clearing margins to a realised variation model (RVM) from the existing contingent variation model (CVM).
But it has committed to retain CVM in the medium term and will embark on a feasibility study that will look into recreating the cash flows of a CVM model for RVM contracts, the exchange said.
“(This) could support the traditional brokerage community in the provision of credit to their smaller physical clients.”