UNITED KINGDOM STOCK EXCHANGES:

WHAT IS A COMMODITY EXCHANGE?

A commodities exchange is an exchange where various commodities and derivatives products are traded. Most commodity markets across the world trade in agricultural products and other raw materials (like wheat, barley, sugar, maize, cotton, cocoa,coffee, milk products, pork bellies, oil, metals, etc.) and contracts based on them. These contracts can include spot prices, forwards, futures and options on futures. Other sophisticated products may include interest rates, environmental instruments ,swaps, or ocean freight contracts. Commodities exchanges usually trade futures contracts on commodities, such as trading contracts to receive something, say corn, in a certain month. A farmer raising corn can sell a future contract on his corn, which will not be harvested for several months, and guarantee the price he will be paid when he delivers; a breakfast cereal producer buys the contract now and guarantees the price will not go up when it is delivered. This protects the farmer from price drops and the buyer from price rises.

HISTORY OR FUTURES:
Futures contracts for agricultural commodities have been traded for more than 100 years and have been under Federal regulation since the 1920s. In the last 20 years, futures trading has expanded rapidly into many new markets, beyond the domain of traditional physical and agricultural commodities. Futures and options now are offered on many energy commodities such as crude oil, gasoline heating, oil, and natural gas, as well as on a vast array of financial instruments, including foreign currencies, U.S. and foreign government securities, and U.S. and foreign stock indices. In recent years, new futures contracts have been offered in non-traditional commodity areas such as electricity, seafood, dairy products, crop yields, and weather derivatives.

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LONDON INTERNATIONAL FUTURES & OPTIONS EXCHANGE:

INTRODUCTION:
The London International Financial Futures and Options Exchange (LIFFE) is the worlds largest electronic exchange by value of financial, equity and non-financial (commodity) products. As the popularity of LIFFE contracts grows accordingly and an increasing number of users are turning to historical data to track trends, perform technical and quantitative analysis and to build and utilise trading models. The analysis of complete tick by tick data, detailing every bid, offer and trade, time stamped, brings market participants a wealth of information about the behaviour of financial prices and new perspectives in the field of risk management and forecasting.

LIFFE' s PRODUCTS:
LIFFE offers the most extensive range of derivative products of any exchange in the world. LIFFE provides futures and options contracts across five different currencies and product lines: bonds, short terms interest rates, swaps, equities and equity indices, and non-financials (commodities). LIFFE continually reviews its products to determine what enhancements can be made to existing products and what new products could be introduced. LIFFE' s products are supported by additional trading facilities that meet the particular needs of the market. For example, inter contract spread, basis, block, Flex trading facilities and against actual.

BOND PRODUCTS:
Futures and option contracts, especially those with the liquidity offered at LIFFE, have helped to pave the path of globalisation. For investors, futures and options markets have offered a tool for hedging the interest rate risk of holding government securities. As these risks are reduced, the incentive to invest outside 2 / 20

ones own country is enhanced. For dealers, futures and option markets offer an effective tool for managing stocks of government securities. With reduced dealing risk these firms are freed to become more active, offering tighter pricing spreads and increased liquidity in the cash markets. There is evidence that the existence of futures and options markets has had the effect of reducing the cost of funding debt for the governments involved.

NON-FINANCIAL PRODUCTS:
LIFFE lists a range of contracts covering soft and agricultural products. These contracts, covering both futures and options, offer an effective and efficient tool for hedging the price risk and volatility inherent in the underlying markets, providing price transparency as well as creating the benchmark for physical market transactions. In recent years commodities have also increasingly been recognised as an important part of an investment portfolio, leading to an increase in the use of such products by managed funds and institutional investors as well as by short-term investors. All LIFFE's Non-Financial Products have been traded on LIFFE CONNECT since 27 November 2000, giving market customers the ability to take advantage of unparalleled trading technology and potential global access. Non-Financial Products Cocoa, Cocoa Future, Option on Cocoa Future Coffee, Robusta Coffee Future, Option on Robusta Coffee Future Wheat, Wheat Future, Option on Wheat Future Barley, Potato Future Cocoa Future Unit of trading Delivery months Delivery units1
10 tonnes March, May, July, September, December, such that ten delivery months are available for trading Standard Delivery Unit bagged cocoa with a nominal net weight of 10 tonnes Large Delivery Unit bagged cocoa with a nominal net weight of 100 tonnes Bulk Delivery Unit loose cocoa with a nominal net weight of 1000 tonnes

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Last trading day Notice day/Tender day Price basis2

Eleven business days immediately prior to the last business day of the delivery month at 12.00 The business day immediately following the last trading day Pounds sterling per tonne in an Exchange Nominated

Warehouse in a Delivery Area which is, in the Boards opinion, in or sufficiently close to Amsterdam, Antwerp, Bremen, Brighton and Hove, Dunkirk, Felixstowe, Ham burg,
3

Humberside,

Liverpool, London, Rotterdam or Teeside

Minimum price movement (Tick size & value) LIFFE CONNECT Trading hours Origins tenderable

1 per tonne (10)

09.30 - 16.50

Cameroon, Cte dIvoire, Democratic Republic of Congo (formerly know as Zaire), Equatorial Guinea, Ghana,
Grenada Fine Estates, Jamaica, Nigeria, Sierra Leone, Togo, Trinidad and Tobago Plantation, Western Samoa at contract price. All other growths tenderable at set discounts

Where necessary upon tender, a seller may be instructed by the Clearing House to convert a

Bulk Delivery Unit into a Large and/or Standard Delivery Units, or a Large Delivery Unit into Standard Delivery Units.
2 3

Bulk Delivery Units are tenderable at a discount of 20 per tonne to the contract price. Contact the Exchange to determine which Delivery Areas have Dual Capacity Warehouse

keepers (i.e. those nominated for the storage of Bulk Delivery Units as well as Standard and Large Delivery Units). Unless otherwise indicated, all times are London times.

Option on Cocoa Future Unit of trading Expiry months

One Cocoa futures contract March, May, July, September, December, such that ten expiry months are available for trading, subject to the option expiring before the underlying future

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Expiry day Price basis Minimum price movement (Tick size & value) LIFFE CONNECT Trading hours Strike price increments

12.00 on the last trading day of the calendar month preceding the expiry month Pounds sterling per tonne 1 per tonne (10)

09.32 - 16.50

25 per tonne

Option Price: The contract price is not paid at the time of purchase. Option positions, as with futures positions, are marked-to-market daily giving rise to positive or negative variation margin flows. If an option is exercised by the Buyer, the Buyer is required to pay the original contract price to the Clearing House and the Clearing House will pay the original option price to the Seller on the following business day. Such payments will be netted against the variation margin balances of Buyer and Seller by the Clearing House. Robusta Coffee Future Unit of trading Delivery months Last trading day Tender period Price basis
5 tonnes January, March, May, July, September, November, such that seven delivery months are available for trading Last business day of the delivery month at 12.30 Any business day during the delivery month US dollars per tonne in an Exchange Nominated Warehouse in London and the UK Home Counties, or in a Nominated Warehouse in, or in the Boards opinion, sufficien tly close to Amsterdam, Antwerp, Barcelona, Bremen, Felixstowe, Hamburg, Le Havre, Marseilles-Fos, New Orleans, New York, Rotterdam and Trieste

Minimum price movement (Tick size & value) LIFFE CONNECT Trading hours Origins tenderable

$1 per tonne ($5)

09.40 - 16.55

Angola, Brazilian Conillon, Cameroon, Central African Republic, Cte dIvoire, Democratic Republic of Congo (formerly known as

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Zaire), Ecuador, Ghana, Guinea, India, Indonesia, Liberia, Malagasy Republic, Nigeria, Philippines, Sierra Leone, Tanzania, Thailand, Togo, Trinidad, Uganda and Vietnam

Unless otherwise indicated, all times are London times. Option on Robusta Coffee Future Unit of trading Expiry months
One Robusta Coffee futures contract January, March, May, July, September, November, such that seven expiry months are available for trading, subject to the option expiring before the underlying future

Expiry day Price basis Minimum price movement (Tick size & value) LIFFE CONNECT Trading hours Strike price increments

12.30 on the third Wednesday of the calendar month preceding the expiry month. US dollars per tonne $1 per tonne ($5)

09.42 - 16.55

$50 per tonne

Option Price: The contract price is not paid at the time of purchase. Option positions, as with futures positions, are marked-to-market daily giving rise to positive or negative variation margin flows. If an option is exercised by the Buyer, the Buyer is required to pay the original contract price to the Clearing House and the Clearing House will pay the original option price to the Seller on the following business day. Such payments will be netted against the variation margin balances of Buyer and Seller by the Clearing House. Unless otherwise indicated, all times are London times. Wheat Future Unit of trading Delivery months Last trading day
100 tonnes January, March, May, July, September, November, such that ten delivery months are available for trading 23rd calendar day of delivery month (in the case of July delivery months, the 7th calendar day) at 12.30 (if not a business day then the first business day immediately preceding)

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Tender period

Except in respect of January delivery, any business day from the seventh calendar day (if not a business day, then the next business day following) preceding the first business day of the delivery month, up to the last trading day of the delivery month inclusive. For January delivery, earliest tender day shall be the second business day after Christmas Day

Price basis Minimum price movement (Tick size & value) LIFFE CONNECT Trading hours Quality

Pounds sterling and pence per tonne, free delivered to buyers lorry in bulk, from a registered store in mainland Great Britain 5 pence per tonne (5)

10.00 - 16.45

EU origin and of the following standard: Sound and sweet and in good condition and to contain not more than 3% heat damage. Natural weight to be not less than 72.5kg per hectolitre. Moisture content not to exceed 15%.
Admixture: i. seeds and/or total admixture of farinaceous grain (including wild oats) and dirt not to exceed 2% of which the dirt content not to exceed 1%; ii. iii. ergot or garlic not to exceed 0.001%; and sprouted wheat not to exceed 8%.

All the above tests to be applied on weight basis

Unless otherwise indicated, all times are London times. Option on Wheat Future Unit of trading Expiry months
One Wheat futures contract January, March, May, July, September, November, such that ten expiry months are available for trading, subject to the option expiring before the underlying future

Expiry day Price basis Minimum price movement

16.45 on the second Thursday of the calendar month preceding the expiry month. Pounds sterling and pence per tonne 5 pence per tonne (5)

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(Tick size & value) LIFFE CONNECT Trading hours Strike price increments Option Price: The contract price is not paid at the time of purchase. Option positions, as with futures positions, are marked-to-market daily giving rise to positive or negative variation margin flows. If an option is exercised by the Buyer, the Buyer is required to pay the original contract price to the Clearing House and the Clearing House will pay the original option price to the Seller on the following business day. Such payments will be netted against the variation margin balances of Buyer and Seller by the Clearing House. Unless otherwise indicated, all times are London times. Barley Future Unit of trading Delivery months Last trading day
100 tonnes January, March, May, September, November, such that six delivery months are available for trading 23rd calendar day of delivery month at 12.30 (if not a business day then the first business day immediately preceding) 1 per tonne 10.02 - 16.45

Tender period

Except in respect of January delivery, any business day from the seventh calendar day (if not a business day, then the next business day following) preceding the first business day of the delivery month, up to the last trading day of the delivery month inclusive. For January delivery, earliest tender day shall be the second business day after Christmas Day

Price basis Minimum price movement (Tick size & value) LIFFE CONNECT Trading hours Quality

Pounds sterling and pence per tonne, free delivered to buyers lorry in bulk, from a registered store in mainland Great Britain 5 pence per tonne (5)

10.00 - 16.45

EU origin and of the following standard: Sound and sweet and in good condition and to contain not more than 3% heat damage. 8 / 20

Natural weight to be not less than 62.5kg per hectolitre. Moisture content not to exceed 15%.

Admixture: i. ii. seeds and/or total admixture of farinaceous grain (including wild oats) and dirt not to exceed 2% of which the dirt content not to exceed 1%; and sprouted barley not to exceed 8%. All the above tests to be applied on weight basis

Unless otherwise indicated, all times are London times.

WEEKLY PRICE FLUCTUATION OF WHEAT

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YEARLY DIFFFERENCE IN THE WHEAT PRISES

SPREAD OF COCOA

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VOLUMES OF CONTRACT OF COFFEE THAT ARE TRADED

PRICE OF ROBUSTA COFFEE

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LONDON METAL EXCHANGE

The London Metal Exchange (LME) is the futures exchange with the world's largest market in options, and futures contracts on base and other metals. As the LME offers contracts with daily expiry dates of up to three months from trade date, along with longer-dated contracts up to 123 months, it also allows for cash trading. It offers hedging, worldwide reference pricing, and the option of physical delivery to settle contracts. It is located at 56 Leadenhall Street in the City of London.

HISTORY
The London Metal Market and Exchange Company was founded in 1877, but the market traces its origins back to 1571 and the opening of the Royal Exchange, London. Before the exchange was created, business was conducted by traders in London coffee houses using a makeshift ring drawn in chalk on the floor. At first only copper was traded. Lead and zinc were soon added but only gained official trading status in 1920. The exchange was closed during World War II and did not re-open until 1952.The range Of metals traded was extended to 12 / 20

include aluminium(1978), nickel (1979), tin (1989), aluminium alloy (1992), steel (2008), and minor metals cobalt and molybdenum (2010). The exchange ceased trading plastics in 2011. The total value of the trade is around $US 11.6 trillion annually. Many deals are made for commodities to be delivered in three months' time.

FEATURES
Transparent pricing The LME provides a transparent forum for the trading of futures contracts for non-ferrous metals, minor metals and steel billet. As a result of this trading, daily prices are 'discovered' and published by the Exchange which the physical industry around the world use as the basis of price negotiations for the physical sale or purchase of metal. Risk management tools Through its trading members, the LME offers those at all stages of the industrial raw materials supply chain, including both buyers and sellers, the opportunity to 'hedge' their price risk, and therefore gain protection from future adverse price movements. Hedging in this way is most efficient when the physical and futures transactions are made basis the current LME price. Delivery points of last resort As a 'market of last resort', the physical non-ferrous metals and steel industries can use the Exchange's delivery option to sell excess stock in times of over supply and as a source of material in times of extreme shortage. The market does not replace the normal channels for the buying and selling of material and only a very small proportion of contracts actually result in delivery. The presence, or 'threat', of physical delivery plays a vital role in creating price convergence between the futures and the physical market.

Warehousing To support this mechanism the Exchange approves and licenses a network of warehouses and storage facilities around the world. Warehouse companies must meet strict criteria before they are approved for the handling of metals. Warehouse Minimum Loading Out Rates On 27 May 2011 the LME issued a notice regarding warehouse minimum loading out rates for the Board of the LME to consider at their meeting on 16 June 2011. Warehouse Locations 13 / 20

LME approved delivery locations are typically located in areas of high consumption and are logisitical trading hubs for the shipment of material. The LME has a formal policy and guidelines on the selection of new delivery points.

TRADING PROCESS
The LME provides the flexibility of three trading platforms; which operate side-by-side: Ring trading 1145 to 1700 hours, London Time Open-outcry is the oldest and most popular way of trading on the Exchange. It is central to the process of price discovery, a term used to describe the way LME official prices are established. These prices are derived from the most liquid periods of trading; the short open-outcry ring trading sessions, and are most representative of industry supply and demand. The official settlement price, on which contracts are settled, is determined by the last offer price before the bell is sounded to mark the end of the official ring. LME select
LMEselect is the official Exchange-operated electronic trading platform. LME member firms are connected to the LMEselect system which allows accredited traders to execute trades electronically. It allows for straightthrough processing in which LMEselect trades are automatically sent to the matching and clearing systems operated by LCH.Clearnet. The system also enables LME members to connect their clients directly to the LMEselect trading system via third party applications, a process known as order-routing.

Telephone trading 24 hours a day The Exchange also supports an inter-office telephone market between LME members which operates 24 hours a day.

TRADING VOLUME
The London Metal Exchange is the world centre for the trading of industrial metals more than 80% of all non-ferrous metal futures business is transacted on our platforms. In 2011 this equated to: $15.4 trillion notional 14 / 20

3.5 billion tonnes 146 million lots record open interest of 3 million lots.

TRADING TIME
Inter-office telephone trading - available 24 hours a day. LME Select - available from 01.00 - 19.00 (London time). Ring trading - available from 11.40 - 17.00 (London time).

LME CONTRACTS
The LME's forward contracts allow producers, fabricators, merchants and consumers to insure against price risk. The LME also offers traded options contracts based on each of these futures contracts, together with traded average price options contracts (TAPOs) based on the monthly average settlement price (MASP) for all metals futures contracts. All LME prices are quoted in US Dollars, but the LME permits contracts in sterling, Japanese yen, and Euros and provides official exchange rates from US Dollars for each of them. Trade is conducted in lots rather than tonnes, with each lot of aluminium, copper, lead and zinc amounting to 25 tonnes. Nickel is traded in 6 tonne lots, tin in 5 tonnes and aluminium alloy and NASAAC in 20 tonne lots. PP and LL are traded in 24.75 tonne lots. The contract for each metal sets out the shapes, weights and methods of strapping (metals) and packaging (plastics). The contract specifications are for the quality and shape which are most widely traded and demanded by industry. Futures Futures contracts are purchases or sales of goods for a specified delivery date in the future at prices established today. Options Option contracts give trade hedgers and investors a flexible alternative to futures as a means of trading on the Exchange. TAPOs TAPO's are Exchange cleared contracts based on the LME Monthly Average Settlement Price (MASP).

LME Aluminium futures contract specification Delivery/settlement dates

First prompt date is TOM which is the next business day from today 15 / 20

The Cash prompt date is two business days from today followed by other daily prompts up to three months TOM, CASH and 3 MONTH prompt rolls on a daily basis Weekly prompts on every Wednesday of the month from 3 months to 6 months Monthly prompts on every third Wednesday from 7 months to 123 months

Quotation
US DOLLAR PER TONNE . Clearing Currencies Dollar, euro , yen .
\

Ring Trading Timings First Session 11:55 1st Ring 12:00 2nd Ring (Official) Kerb Trading* 12:55 13:00 13:20 14:45

Second Session 1st Ring 2nd Ring 15:15 15:20 15:55 16:00

Kerb Trading 16:15 17:00 16 / 20

LME Copper Futures Contract Specification Delivery/settlement dates

First prompt date is TOM which is the next business day from today The Cash prompt date is two business days from today followed by other daily prompts up to three months TOM, CASH and 3 MONTH prompt rolls on a daily basis Weekly prompts on every Wednesday of the month from 3 months to 6 months Monthly prompts on every third Wednesday from 7 months to 123 months

Quotation
US DOLLAR PER Tone

Clearing currencies
US dollar, Japanese yen, sterling, euro Ring Trading Timings First Session 1st Ring 2nd Ring (Official) Kerb Trading* 12:00 12:05 12:30 12:35 13:20 14:45

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1st Ring 2nd Ring Kerb Trading

15:10 15:15 15:50 15:55 16:15 16:55

Trading specifications for LME Steel Billet Delivery dates Daily from cash to 3 months (first prompt date two working days from cash) . Then every Wednesday from 3 months to 6 months. Then every third Wednesday from 7 months out to 15 months US dollars per tonne US dollars

Quotation Clearable currencies Minimum Ring - Outright $0.50, Carries Price $0.01 Movement LME select - Outright $0.10, Carries $0.01 Inter-office Outright/Carries $0.01 Contract FM code

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Steel billet Ring trading times First Session 1st Ring 11:40 11:45 2nd Ring (Official Prices) 13:05 13:10 Kerb Trading* 13:20 14:45 Second Session 1st Ring Kerb Trading 15:30 15:35 16:15 16:40

LME ATEEL BILLET PRICEs

LME Nickel Futures Contract Specification Delivery/settlement dates

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First prompt date is TOM which is the next business day from today The Cash prompt date is two business days from today followed by other daily prompts up to three months TOM, CASH and 3 MONTH prompt rolls on a daily basis Weekly prompts on every Wednesday of the month from 3 months to 6 months Monthly prompts on every third Wednesday from 7 months to 63 months

Quotation
US DOLLAR PER Tone

Clearing currencies
US dollar, Japanese yen, sterling, euro LME Nickel Ring trading times First Session 1st Ring 2nd Ring (Official) Kerb Trading* 12:15 12:20 13:00 13:05 13:20 14:45

Second Session 1st Ring 2nd Ring 15:25 15:30 16:05 16:10

Kerb Trading 16:15 16:45

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