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In LME website Prompt Date Structure is explained as this.

Why there are prompt dates? LME trading calendar isn't universal to all other calanedars found in the market. So how do "Non-tradable dates and substitute prompt dates" affect other trading calendars? How are traders from other regions trading at their local calendar/exchanges do adjustments or how does prompt dates affect them?

Can someone give a simplified example using above concept with regards to a metal trading in an Asian region?

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By Prompt dates, LME means dates on which contract trades. Normally, you see monthly contracts. Prompt month is also front month. LME is providing daily contracts up to 3 months out, then weekly and so on as in your reference.

Generally prompt month is the front month or nearby month that is closest unexpired month. You can replace month by day or week as is the frequency. Probably better to talk interms of prompt contract. Trading systems have mechanism of determining prompt month ( aka front month, nearby month). By the same token for daily contracts they can have first nearby contract. you get the picture.

There is no trading without knowing the market in which you are trading. If you are in Asia trading nn LME you have to follow LME rules. It does not matter where you are - what matters is where you are trading. All traders, anywhere, have to follow the calendar of the market they are trading. E.g. If you are in UK, trading S&P in NYSE, then you have to know you cannot trade on July 4th as that is a holiday. If you are holding a position you want to sell that day, you cannot.

All trading systems are market aware, they plug into them holidays, settling currencies, settlement rules etc which local traders know and expect them there in their trading system.

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  • $\begingroup$ +1 for answering in the first place. Quoting: If you are in Asia trading nn LME you have to follow LME rules. It does not matter where you are - what matters is where you are trading. Assuming Japan has a holiday on a Wednesday - which is also a prompt date of a contract the particular trader is holding. So from Japan & UK trading calendars' perspective, how can he do a merged (a two country specific) calendar day counts for his LME contracts - so he can keept a track and will not mess things out due to local (Japan holidays) or vise versa. $\endgroup$ – bonCodigo May 16 '14 at 22:52
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    $\begingroup$ Good question, to best of my knowledge, you would merge calendars if it is specified on the contract normally OTC. Like I said if you are trading on an exchange you have to follow the exchange rules. Now, if what you state is a real scenario then I can think like this - if the company is clearing through some local brokerage that follows local rules or holidays, then that would be additional restriction on the trader, then you would have to merge the holiday calendars. Have not heard of merged day count-but am open to learning about it if you have such a reference. $\endgroup$ – user12348 May 17 '14 at 0:03
  • $\begingroup$ It was a matter of how a built in market data API (vastly used by traders) handles LMEX futures prompt date structures. I am trying to digging in for more info - as of now I can't find the underlying history of the client's query. Nonetheless, I will get in touch with you. If you don't mind - I keep the question open (to say not marking the answer). $\endgroup$ – bonCodigo May 22 '14 at 3:52

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