HOTLINE: Speculating on the LME? Hedging? Or spedging?

Alcoa’s recent calls for the London Metal Exchange to provide more information on the status of position-holders in the market have prompted some to question the degree to which it is possible to know whether companies are hedging or speculating.

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Alcoa’s recent calls for the London Metal Exchange to provide more information on the status of position-holders in the market have prompted some to question the degree to which it is possible to know whether companies are hedging or speculating.

One broker told Hotline there was a word to describe trading activity whose purpose was somewhat obscure. Are users of the market speculating? Or hedging?

When it is not clear, you may just conclude that they are “spedging”, and welcome the volumes that result, he said.

It is not a category on the commitment of traders reports on other exchanges.

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editorial@metalbulletin.com

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