London Metal Exchange will reopen its open outcry trading floor
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LONDON -The London Metal Exchange said on Tuesday it will reopen its open outcry trading floor on Sept. 6, but added that it also believes electronic trading is the way forward.
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."
(Reporting by Pratima Desai and Eric Onstad; editing by Louise Heavens and Jason Neely)
