What Is the London Metal Exchange (LME)? The London Metal Exchange (LME) is a commodities exchange that deals in metals futures and options. It is the largest exchange for options and futures contracts for base metals, which include aluminum, zinc, lead, copper, and nickel. The exchange also facilitates trading of precious metals like gold and silver.
What Is a Long-Dated Asset? A long-dated asset is a type of income-generating asset, such as residential mortgages and 30-year bonds, where the revenue streams occur until that asset’s maturity date (which is well into the future). Key Takeaways A long-dated asset is a type of income-generating assets—such as residential mortgages and 30-year bonds—where the
What Is Long the Basis? Long the basis is a trading strategy in which an investor who owns or has bought a commodity hedges their investment, or gives themselves a little buffer against potential market fluctuations, by selling futures contracts on that commodity. Taking such action provides a guaranteed price at which they may sell
What Is a Long Put? A long put refers to buying a put option, typically in anticipation of a decline in the underlying asset. The term “long” here has nothing to do with the length of time before expiration but rather refers to the trader’s action of having bought the option with the hope of
What Is a Long-Term Incentive Plan? A long-term incentive plan (LTIP) is a company policy that rewards employees for reaching specific goals that lead to increased shareholder value. In a typical LTIP, the employee, usually an executive, must fulfill various conditions or requirements. In some forms of LTIPs, recipients receive special capped options in addition
What Is a Limited Liability Company (LLC)? A limited liability company (LLC) is a business structure in the U.S. that protects its owners from personal responsibility for its debts or liabilities. Limited liability companies are hybrid entities that combine the characteristics of a corporation with those of a partnership or sole proprietorship. While the limited
What Is the Loan Life Coverage Ratio (LLCR)? The loan life coverage ratio (LLCR) is a financial ratio used to estimate the solvency of a firm, or the ability of a borrowing company to repay an outstanding loan. LLCR is calculated by dividing the net present value (NPV) of the money available for debt repayment by
What Is Lloyd’s of London? Lloyd’s of London, often referred to today simply as Lloyd’s, is an insurance and reinsurance marketplace. Its members operate as syndicates to provide insurance coverage for businesses, organizations, and individuals. The syndicates specialize in different types of risks and each syndicate decides which risks to insure. The main purpose of
What Is a Load-Adjusted Return? A load-adjusted return is the investment return on a mutual fund that has been adjusted for the fund’s sales loads and specific other charges, such as 12b-1 fees. Loads, or fees charged by some mutual funds for marketing or buying and selling shares, are like all other investment fees in
What Is a Load Spread Option? A load spread option is a method of collecting the annual fees from investors in load funds through periodic deductions. The idea is somewhat similar to a spread-load contractual plan. The investor can always opt to pay the fees in one lump sum. However, the load spread option provides
