Bloomberg News

LME Starts Proximity Hosting in Upgrade to Increase Trading

December 06, 2011

(Updates with LME in third paragraph.)

Dec. 6 (Bloomberg) -- The London Metal Exchange added so- called proximity hosting and upgraded its electronic trading system that may help increase trading and revenue.

Proximity hosting allows members and clients to locate their trading systems close to the exchange’s data center to speed up orders, said Glen Chalkley, deputy head of business development at the LME. Trading on the exchange may increase from the upgrade after volume rose more than 20 percent so far this year, the LME said in a statement today.

“Speed is certainly key,” said Caroline Davis, a managing director in London at Ffastfill Plc, a trading software provider. Proximity hosting should be of interest to “black box” or algorithmic traders as well as other people who want to reduce the time between an order and execution, she said.

The upgraded LMEselect 7 platform was developed by the LME, Xchanging Plc and Cinnober Financial Technology AB, the exchange said.

The upgrade also allows the exchange to manage “iceberg orders” that hide the major part of a very large trade to minimize the effect on prices, the LME said.

The exchange, which accounts for 80 percent of global trade in metals futures, handled $11.63 trillion in contracts last year.

--Editors: Claudia Carpenter, Dan Weeks

To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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