Market Making Members of the LBMA trade with each other and on behalf of a global client base, comprising: most central banks holding gold; mining companies; investors; refiners; manufacturers of jewellery and industrial products; and other traders.
Trading between LBMA Market Makers trade and their clients is on a principal-to-principal or Over The Counter (OTC) basis. This provides confidentiality and ensures all risks, including those of credit, stay between the two counterparts of the transaction.
Unlike an Exchange, where trading is based around standard contract units, settlement dates and delivery specifications, an OTC market allows for a greater degree of flexibility. The two counterparts to a transaction can bilaterally agree or customise the details of the transaction in terms of quotes, price, size and, if appropriate, the destination for physical delivery. However, only gold and silver bars that meet the LBMA’s London Good Delivery standards are acceptable for delivery of transactions settled through the global OTC market.
Find out more about Market Makers and who they are by clicking here.