Tullett Prebon debuts electronic trading system for LME members

Source: Tullett Prebon

Tullett Prebon, part of TP ICAP, the world’s largest interdealer broker, is today pleased to announce the launch of an electronic trading solution for members of the London Metal Exchange (LME) to help them manage so-called “broken-dated carries”.

Broken-dated carries occur when a trader’s risk is spread across multiple dates, making them time-consuming, risky and costly to settle. To help solve this problem, Tullett Prebon, which is a category 2 member of the LME, will roll out its algorithmic matching system, tpMATCH, as the industry gathers for the annual LME week.

tpMATCH was launched in 2010 and helps traders manage portfolios of risk by simultaneously executing multiple transactions between sellers and buyers in markets including Rates and Foreign Exchange. The platform recently executed a record $2 trillion in a single risk mitigation operation.

LME traders, working for one of the 41 category 1 and 2 members, can submit their orders and positions into the algorithm, which will apply its successful matching technology in twice weekly runs. Trades will be executed on a “name give up” basis between participants, meaning both sides of any trade will be aware of the other’s identity. The service will be managed by staff with extensive experience in the metals market and will work closely with the Tullett Prebon base metals desk.

Paul Ribbins, Managing Director of Tullett Prebon’s Risk Management Solutions division, said:

“We believe tpMATCH will help members to manage their broken-dated card risk by centralising liquidity, creating cost efficiencies and maximising volume through algorithmic matching technology, which has never been used in the base metals market before. We hope to build a strong position in the market and we will continue to look for further opportunities across the broader commodities space.”

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