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LME puts open outcry “Ring” under review as electronic trading proves worth during pandemic


COVID-19 might be set to claim another venerable casualty as the London Metal Exchange said that after 144 years it was considering going fully online and ending its long history of open outcry trading.

Characterised by the ‘Ring’, a circle with a red leathered perimeter of seats, the impact of the pandemic has brought the argument about electronic trading versus face-to-face dealings to the fore.

Trading on the floor of the LME halted in March as the first UK lockdown came into force and a paper published today proposed the arrangement be made permanent.

Matthew Chamberlain, chief executive, said going electronic would improve price transparency and increase the number of global participants.

“The LME believes it is the right time to consider the permanent closure of the Ring and a move to an electronic pricing structure, he said in a statement.

“The Ring is a greatly treasured aspect of the LME’s rich 144-year history, and its closure is not a decision we or our market will take lightly.

“However, the LME has stood the test of time precisely because of its ability to adapt to the evolution of market dynamics and trading behaviour.”

Chamberlain added that COVID-19 was not a pretext for closing the Ring, but added electronic pricing had worked well.

Traders and customers have until March to give their views with the LME aiming to give a response by the end of June.

“A board meeting in April will consider the feedback and appropriate decisions will be made there. We will aim to publish something in the second quarter of this year,” Chamberlain said.

“If the virus situation resolves itself before the process is completed we will, if the members want, open the ring.”

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