Last days of shouts across trading floor?

ONE of the City’s most venerable trading traditions could come to an end if electronic deal-making systems are adopted at the London Metal Exchange.

For 140 years, the LME has set the world’s prices for commodities such as copper, lead and zinc through open outcry auctions – intense five-minute sessions where buyers and sellers shout prices at each other across a ring of red sofas.

But this method of trading could soon become a thing of the past as the exchange embraces opportunities offered by computing.

It is set to run a trial of new technology next year that could replace the ring if it proves more effective. The LME’s owner Hong Kong Exchanges and Clearing carried out a review of the ring after buying the business for £1.4bn in 2012, and decided to keep it open. It spent £1m on technology upgrades two years later, and has introduced stricter rules governing how auctions work.

But the LME’s chief executive Matthew Chamberlain said hedge funds, speculators and other firms which rely on the organisation’s metal prices have asked it to examine alternatives.