How it works

Clearing operates through our clearing platform Synapse.  The LME systems handles trades up to the point of matching then forwards them to the clearing system. 

Synapse is open for the registration of trades between 07.30 hrs and 20.00 hrs London time.

On receipt and confirmation of eligible transactions into Synapse, trades are governed under the rules of the LCH.Clearnet rulebook.

Initial margins are re-calculated at the close of each business day using the London SPAN algorithm.  Realised margin is the calculated profit or loss arising from a comparison between the value of open positions at the relevant official quotations with the value of positions recorded in Synapse.  Variation margin for LME Index futures contracts (LMEX) and LMEminis is realised into postings to Clearing Members’ financial accounts.

Non-realised variation margin is calculated with reference to the original trade price and the relevant official quotation. Non-realised variation margin is applicable to LME metal futures.

As premium is paid up front, option variation margin is the value of unexpired options, calculated with reference to the official quotation. Bought and sold options generate credit and debit option variation margin respectively.

Members of LCH.Clearnet and the LME are eligible to clear products subject to approval.  More information on becoming a member can be found here.