Tokyo Commodity Exchange
Tokyo Commodity Exchange (TOCOM) brokers offer trading on the commodities derivatives exchange located in Tokyo, Japan. Throughout its history, TOCOM has aimed to facilitate the trading of products that are based on the Commodity Derivates Act (the act that regulates any business around domestic commodities in Japan). This article lists the best Tokyo Commodity Exchange brokers, alongside its history, products and opening hours. Find out how to compare the top brokers with access to the Tokyo Commodity Exchange in 2023.
Tokyo Commodity Exchange Brokers
These are the 2 best brokers for trading on the Tokyo Commodity Exchange:
#1 - eToro
eToro is a top-rated multi-asset platform which offers both investing in stocks and cryptoassets. Launched in 2007, the brand has millions of active traders globally and is authorized by tier one regulators, including the FCA and CySEC. Crypto Trading is offered via eToro USA LLC; Investments are subject to market risk, including the possible loss of principal. CFDs are not available in the US Cryptoasset investing is highly volatile and unregulated in the UK and some EU countries. No consumer protection. Tax on profits may apply. 76% of retail accounts lose money.
"eToro is a great pick for traders who want to trade CFDs with copy trading and other social investing features. The brand is hugely respected with a string of awards and strong regulatory oversight."- DayTrading Review Team
- Instruments: Crypto
- Regulator: FCA, ASIC, CySEC, FSA
- Platforms: TradingCentral
- Min. Deposit: $10
- Min. Trade: $10
- Islamic/Halal-friendly account
- Low minimum deposit requirement
- Interest up to 5.35% on idle funds
- No guaranteed stop loss
- Currency conversion fees for account denominations other than USD
- Limited contact methods
#2 - DEGIRO
DEGIRO is a Netherlands-headquartered broker with millions of users and authorization from leading regulators, including the BaFin and FCA. Clients can access global exchanges anytime, anywhere, and on any device. DEGIRO offers stock trading with exceptionally low fees and a huge range of markets. DEGIRO are not CFD brokers and do not offer CFDs.
"Degiro is perfect for low-cost stock trading on US, UK and European markets with a straightforward platform and app. Casual investors will appreciate that there are no inactivity fees while long-term traders will rate the wide selection of ETFs."- DayTrading Review Team
- Instruments: Stocks, ETFs, Bonds, Futures, Options, Warrants
- Regulator: BaFin, FCA
- Platforms: Own
- Min. Deposit: $0
- Min. Trade: Variable
- Beginner-friendly platform and app
- Low minimum deposit
- No inactivity fee
- No copy trading
- No demo account
- No MT4 integration
How To Compare Tokyo Commodity Exchange Brokers
There are many factors to consider when choosing between Tokyo Commodity Exchange brokers:
How can you trade the Tokyo Commodity Exchange? Do Tokyo Commodity Exchange brokers permit traders access to both futures and options contracts within one account? It will be beneficial to have the option to trade all commodities listed on the exchange via one brokerage portal. This saves time and hassle of having to switch between accounts to trade specific instruments.
The best Tokyo Commodity Exchange brokers will offer a choice of third-party platforms and proprietary software. You will need live price quotes, customizable charts, analysis tools and access to historical data to help with investment decisions.
Consider how user-friendly the terminal is. Some traders consider MetaTrader as particularly dated, though it does provide all the advanced investing tools most will need.
Not only is a suitable desktop platform important, but also look out for mobile-compatible apps so you can trade commodities while on the go.
Costs can quickly eat away at your overall profit margin so look out for Tokyo Commodity Exchange brokers with commission-free trading or tight spreads. Aizawa Securities Co Ltd, for example, charges 2,750 yen for contracts of 217,391 yen or less.
Remember, you may be liable for a membership fee to access the commodities listed on the exchange. Some Tokyo Commodity Exchange brokers may absorb these costs on behalf of their investors.
Other costs to consider include account management charges or overnight rollover fees.
The best Tokyo Commodity Exchange brokers will provide access to a reliable customer support team. Helpline telephone numbers with multi-lingual support will be the most important for quick help and guidance, though also look out for live chatbots.
Some TOCOM brokers offer 24/7 customer support, with waiting times of less than one minute.
What Is The Tokyo Commodity Exchange?
The Tokyo Commodity Exchange Inc. (TOCOM), known locally as Tokyo Kogyoin Torihikijo (Commodity Exchange), is a commodities futures exchange in Tokyo, Japan. It is Japan’s largest and one of Asia’s most prominent commodities exchanges. Through the exchange, traders can purchase futures and options on a range of energy and Chukyo oil products. According to recent annual reports, the Tokyo Commodity Exchange has received total annual revenues of over US$38 million.
The Japan Exchange Group (JPX) purchased the Tokyo Commodity Exchange (TOCOM), after which TOCOM was converted into a wholly-owned subsidiary of the JPX. Following this, many products were transferred to the Osaka Securities Exchange, another subsidiary of the JPX.
Brief History Of TOCOM
The Tokyo Commodity Exchange was established in 1984 as the result of the merger of three exchanges:
- The Tokyo Textile Exchange (established in 1951)
- The Tokyo Rubber Exchange (established in 1952)
- The Tokyo Gold Exchange (established in 1982)
Initially, the Tokyo Commodity Exchange focussed on products like rubber, gold and silver. However, over the following decades, they broadened their range and added assets such as palladium, aluminium and crude oil. These assets are now available at the top TOCOM brokers.
In 2013, the Tokyo Commodity Exchange acquired the Tokyo Grain Exchange. Following this, they launched their Agricultural Product and Sugar Market, offering all the products previously traded on the Tokyo Grain Exchange.
In 2019, the Japan Exchange Group (JPX) put in an offer for TOCOM’s shares. The Tokyo Commodity Exchange was then converted into a subsidiary of the Japan Exchange Group, joining the Tokyo Stock Exchange (TSE) and Osaka Securities Exchange (OSE).
What Can You Trade On TOCOM?
Until recently, the Tokyo Commodity Exchange operated markets for metals, oil, rubber and agricultural commodities. Traders could purchase futures and options contracts on the following:
- Crude oil
- Natural rubber
However, following the transition to the Japan Exchange Group (JPX), many of these commodities were transferred to the Osaka Securities Exchange (OSE), another exchange owned by JPX. Today, Tokyo Commodity Exchange brokers only offer these products in the energy and Chukyo oil markets:
- Gas oil
- Dubai crude oil
- Chukyo gasoline
- Chukyo kerosene
- East area baseload electricity
- West area baseload electricity
- East area peak load electricity
- West area peak load electricity
What Are Futures & Options?
Traders purchase futures and options contracts for different products via online Tokyo Commodity Exchange brokers.
Futures and options are derivatives that both give investors the chance to make money or hedge current investments. An option gives the buyer the right to buy or sell an asset at a specific price within the life of the contract. With options, the buyer is not obligated to buy or sell the asset in question. Typically, buyers pay a premium for options contracts.
A futures contract operates in a similar way to an option, except that the buyer is obligated to buy or sell the asset by the expiration time of the contract. These are important for commodities like crude oil. The seller wants to lock a price in incase market prices fall, while the buyer wants to lock in an acceptable price in case the market price soars by the time the crop is delivered.
Futures and options are both derivative forms of investment. This means that, until the contract is closed, the buyer does not have actual ownership of the underlying assets.
The Tokyo Commodity Exchange has been using an electronic trading platform since 2009 when they launched a platform based on the Nasdaq OMX technology.
In September 2016, the Tokyo Commodity Exchange started using the new J-Gate trading platform developed by the Japanese Exchange Group (JPX). This allowed seamless integration with the rest of the JPX Group’s systems. Over-the-counter (OTC) and physical contracts were added to the platform as well.
TOCOM CEO & Members
The Tokyo Commodity Exchange is spearheaded by the president and CEO, Takamichi Hamada. Beneath him, TOCOM has 80 members and 54 Futures Commission Merchant (FCM) members.
Since 2010, the exchange has allowed foreign commodity TOCOM brokers to trade in its markets through intermediaries. This expanded the opportunities for foreign investors to trade on TOCOM.
One of the features of the Tokyo Commodity Exchange is that it oversees its own regulation as a self-regulatory organization (SRO). The process for self-regulation and the establishment of a self-regulatory Committee (SRC) is set by the Financial Instruments and Exchange Act in Japan. The self-regulating committee is required to be composed of outside directors. This is to ensure that there is no conflict of interest and the committee is independent of the trading, clearing and any other operations of the exchange.
The Tokyo Commodity Exchange’s self-regulatory committee covers the following areas: the examination of members qualifications, sanctions against members and examination of trades and trade practices.
The top Tokyo Commodity Exchange brokers are also regulated in the areas in which they operate.
TOCOM Trading Hours
The Tokyo Commodity Exchange operates two separate sessions per day during the week, with a break in between:
- The day session for the Tokyo Commodity Exchange goes live at 08:45 and operates until 15:15 JST (GMT + 9). Orders are accepted from 08:00.
- The night session then runs from 16:30 to 19:00 JST. Orders are accepted on the exchange from 16:00. The energy market closes at 17:30 JST.
Tokyo Commodity Exchange brokers will reflect the above timings in their operating activities. Note, the exchange is closed on Saturdays, Sundays and national holidays.
The Tokyo Commodity Exchange has a busy calendar full of holidays. Below we have listed the key holidays, which generally stay the same from 2023 and beyond.
- New Year’s Day – January 1st-3rd
- Coming of Age Day – January 11th
- National Foundation Day – February 11th
- Emperor’s Birthday – February 23rd
- Vernal Equinox – March 20th
- Showa Day – April 29th
- Constitution Memorial Day – May 3rd
- Greenery Day – May 4th
- Children’s Day – May 5th
- Marine Day- July 22nd
- Sport’s Day – July 23rd
- Mountain Day – August 8th (observed August 9th, 2021)
- Respect for the Aged Day – September 20th
- Autumnal Equinox – September 23rd
- Culture Day – November 3rd
- Labor Thanksgiving Day – November 23rd
- New Year’s Eve – December 31st
Types Of Membership
The Tokyo Commodity Exchange offers a variety of different membership classes with different monthly fees:
- Broker Members: JPY 60,000 per market division
- Trade Members: JPY 50,000 per market division
- Remote Broker Members: JPY 50,000 per market division
- Remote Trade Member: JPY 50,000 per market division
- Affiliate Member: JPY 10,000 per market division
Broker members of the Tokyo Commodity Exchange are granted direct access and voting rights. These are members who have been accredited with a Futures Commission Merchant license. General trade members are not allowed direct access but do have voting rights.
The Japan Commodities Clearing House (JCCH) is tasked with establishing the rules for margin requirements for Tokyo Commodity Exchange customers.
Since 2011, the JCCH have used the same model developed by the Chicago Mercantile Exchange in 1988, the Standard Portfolio Analysis of Risk, or SPAN model. This uses grid simulation to calculate the likely loss in a set of derivative positions. This value is then set as the initial payable margin.
TOCOM Market Data
The Tokyo Commodity Exchange provides a wide variety of market data to clients and investors. This includes quotes for individual products, quotes for all products by trade date, quotes for all products by session, spread market data, periodic quotes for all products by trade date, trading volume and much more.
The best Tokyo Commodity Exchange brokers will integrate this information in a comprehensive manner for retail investors to access via their online platforms.
How To Trade On TOCOM
Want to start speculating on products on the Tokyo Commodity Exchange? A great way to do this in the UK or globally is to trade contracts for differences (CFDs) and options through Tokyo Commodity Exchange brokers. This step-by-step guide will help you get started:
- Select A Broker: Before you begin trading, you need to select from the available TOCOM brokers. Key things to look out for when selecting the top brokerage for Tokyo Commodity Exchange investing are fees, customer service, platforms and product offerings.
- Open An Account & Deposit Funds: Once you have found a broker, open an account and go through the appropriate verification steps. This could include proof of address and know-your-customer (KYC) verification. With the proper certification, investors can open accounts at Japanese brokerages and trade on the TSE in a matter of days. Once this is complete, deposit funds to the account.
- Research The Market: Go through all the appropriate market data and analyse it to try and spot assets you believe you could profit from.
- Open A Position: When you have found the right product, open a position by purchasing a leveraged CFD, future or options contract.
- Monitor & Close Position: Monitor the market and check the value of your asset regularly. When the time is right, cash in your instrument and reap the rewards.
Before you start investing, check out these tips to boost your profits:
- Stay Up To Date: Staying up to date with news and announcements is key to trading on any exchange, and the Tokyo Commodity Exchange is no different. News events can indicate which way the value of a product is likely to go, giving key information before you make trades.
- Demo Accounts: If your chosen broker offers one, a demo account is a great place to practise a strategy before you begin investing real money on the Tokyo Commodity Exchange. Demo accounts essentially allow you to perfect your system without the risk of losing money.
- Keep Learning: The best traders always do all they can to keep studying and learning new strategies and tips. Make sure you do the same and make use of the wealth of resources on sites such as YouTube.
Final Word On Tokyo Commodity Exchange Brokers
The Tokyo Commodity Exchange is one of the largest exchanges of its kind. With a rich history in rubber and gold futures and many exciting products in the energy and Chukyo oil markets, the exchange is known all over the world. If you want to start trading products listed, follow our Tokyo Commodity Exchange brokers comparison guide and top tips above.
Can I Trade Rubber And Gold Futures At TOCOM Brokers?
Until recently you could. However, after joining the JPX, those commodities have transferred to the Osaka Securities Exchange. TOCOM brokers now deals primarily with energy and Chukyo oil.
Can I Purchase Stocks At TOCOM Brokers?
No, you cannot purchase stocks on TOCOM. The exchange focuses on energy and Chukyo oil derivatives.
Is It Safe To Invest On The Tokyo Commodity Exchange Via Online Brokers?
The Tokyo Commodity Exchange is a well respected and internationally known exchange that provides secure services to clients. To increase your chance of a secure investing experience, only trade with trusted TOCOM brokers.
When Are TOCOM Brokers Open?
The Tokyo Commodity Exchange operates two sessions on weekdays. The first is from 08:45 to 15:15 JST and the second is from 16:30 to 19:00 JST. The top TOCOM brokers will offer market access during these periods.
Is TOCOM Closed On New Year’s?
Yes, TOCOM is closed over the New Year period. Refer to our list for the full range of holidays or visit your Tokyo Commodity Exchange broker’s market calendar.