What Is TOCOM?

By Jack Wagon.

"TOCOM" is an acronym of Tokyo Commodity Exchange. It is a non-profit company based in Japan. The task of TOCOM is that it controls the trading and production of all the goods and commodities of Japan. Let us have a look at few of the specific characteristics of this organization:

The Tokyo Gold Exchange, The Tokyo Rubber Exchange and The Tokyo Textile Exchange fused in 1984 to form together another exchange, now known as The Tokyo Commodity Exchange. It is Japan's largest commodity futures exchange services and has a trading volume of 41 million contracts.

The function of this body is two fold: to unbolt and to control commodity markets that will be used for the trading of all these products that will be manufactured out of them. The traded contacts of this body are "futures" and "options"

Tokyo Commodity Exchange, Inc. This body strives to become a prominent plagiaristic exchange in Asia. This body introduced its new system, which meets international standards on functionality, and has the highest level of performance in the world. This body introduced the new system, resulting from the combination of the internationally recognised NASDAQ OMX technology and the exceptional skills of NTT Data in operating systems. This body aims to offer a wider range of services to all market participants in a faster and more efficient way, in order for the Japanese Exchange to grow and better position itself among global derivatives markets.

While oil futures contracts comprise of gasoline, kerosene and crude oil. As mentioned earlier, Japan's commodity exchange, this body has been facing major challenges for quite long. For quite a number of years, commodity future contract volumes have been declining. In the fiscal year that was 2003, around 155.8 million futures contracts changed hands on all of the commodity exchanges in Japan.

Trading of precious metals, aluminium, and oil are held in two sessions, first from 9 a.m. to 11 a.m. and then from 12:30 p.m.- 5:30p.m. All orders for these products, are first entered, modified, or removed, and then matched at a single price at which, they can be executed. After that, orders are constantly executed based on price, and time priority.

Tokyo Commodity Exchange, Inc. has announced two types of Exchange Traded Funds (ETF), which invest directly in its gold futures contract, and its platinum futures contract respectively. They have been approved for listing on the Osaka Securities Exchange on February 15, 2010. These Japanese ETFs are the first to invest directly in the Japanese commodity futures market.

A brief review about TOCOM and its few features was mentioned in this article. People who might want to take a view of the activities of TOCOM can use the following visiting address: Tokyo Commodity Exchange, 10-7 Nihonbashi Horidomecho 1-Chome, Chuo-ku, Tokyo 103-0012, Japan

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