Streetwise Professor

June 10, 2011

London Calling

Filed under: Commodities,Derivatives,Exchanges — The Professor @ 2:07 pm

I’m in London for a conference at the LSE. Here with the family, and we’ve seen most of the typical sites (it’s my family’s first time in the city).

The highlight for me, however, was watching the ring trading at the London Metal Exchange. (Yes.  You don’t need to tell me.  I know I’m weird.)  Very interesting.  Each metal trades for five minutes–in theory.  In reality, there is desultory bidding and offering until the last 30-45 seconds of the 5 minute period, at which time trading really picks up.  A visual illustration of volume clustering.  Although it is face-to-face open outcry trading, it is very different than Chicago.  It is more like a sequence of call auctions, rather than a true continuous auction.  Moreover, the trading crowd is small–there were 15 people in the ring, and about twice that many clustering around it.  I’m glad I could see it, after having worked with LME data and studied metals rather extensively for about 18 years (yikes!)

Thanks to Allan Schoenberg for helping to set things up, and special thanks to Miriam Heywood at the LME for giving us the tour.

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  1. Did you see the scandium bust of Tim Worstall in the lobby?

    Comment by Tim Newman — June 11, 2011 @ 1:01 am

  2. No. . . Missed that one!

    The ProfessorComment by The Professor — June 11, 2011 @ 2:04 am

  3. That is just Mr. Newman joshing with you.

    My day job is handling some 50% of the globe’s consumption of scandium (all 4 or 5 tonnes a year of it). No, Sc is not an LME traded material!

    Although I did go to the LSE so perhaps that’s what Tim meant……

    Comment by Tim Worstall — June 13, 2011 @ 5:01 am

  4. Glad I could help make this happen.

    Comment by Allan Schoenberg — June 13, 2011 @ 5:54 am

  5. Heh heh!

    Comment by Tim Newman — June 13, 2011 @ 11:36 pm

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