VAR migration postponed at LME amid nickel crisis review

Clearing house faces tricky balance between arbitrage trades and corporate metals hedging

London Metal Exchange
Lourens Smak/Alamy Stock Photo

Planned updates to margin models at LME Clear have been postponed, according to market participants, while the clearing house continues to digest the lessons of the 2022 blow-up in nickel markets.

The central counterparty (CCP) has been using value-at-risk as an extra layer of assessment for its existing margin model since 2019 with full regulatory approval, but three sources familiar with the plan to switch over entirely to VAR say it is currently on hold.

“The VAR change is probably not going to

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