Settlement before maturity: LME metal forwards

Discussion in 'Commodity Futures' started by gynmeerut, May 22, 2007.

  1. gynmeerut


    Could anyone tell me "How forward prices are marked to market(revalued) at LME?"

    I want to know, how the settlement of LME metal 3M-forwards takes place if one wants settlement before maturity(Method)?

    In other words, If I take a 3-Month forward contract on Copper today, what will be the settlement price for this contract if I want to sell it before maturity?.In particular, how will the settlement take place if I sell it after 10 days and at what price will the settlement take place(Method to arrive at the settlement price)?

    * In futures market we get futures prices on daily basis upto the maturity of contract from the exchange, but in case of LME, as per my knowledge there is a new forward contract on daily basis. So everyday there is a price for a new contract. How to arrive at the daily price of a particular contract until it expires?

    Any help would be very useful.