Contract Months and Delivery
6 Contract Months
On TOCOM all commodity futures contracts have 6 separate contract months available for trading at any one time. In the example above, you can see the TOCOM Gasoline contracts offered on June 1st, 2008. The most recently expired contract is the June 2008 contract and is no longer trading. The nearby or spot month that will be the next contract to expire is the July 2008 contract. The most forward contract is the December 2008 contract. The next upcoming contract that will commence trading the day after the July 2008 contract expires is the January 2009 contract. In between the nearby and forward contracts are 4 more contracts offered in consecutive monthly order. Some TOCOM products offer a contract every other month instead of in consecutive months such as TOCOM metal contracts.
Delivery and Open Positions
Most commodity futures contracts traded on TOCOM are deliverable contracts (except for cash settled contracts such as TOCOM Crude Oil). Dot Commodity does not handle delivery for any commodity products so any open position in the spot month must be closed out prior to the last trading day according to Dot’s deadline. Otherwise, the open position will be automatically liquidated before the expiry of the contract as a market order by Dot. Most traders close out their open position well before the expiry date and "roll-over" the open position by creating a new position in the same commodity in the forward month. Additional margin is required to have an open position in the spot or nearby contract because of higher volatility and lower liquidity. Additionally, unlike many overseas commodity markets, the spot or nearby contract on Japanese Commodity Exchanges are generally illiquid. The most liquid contracts on TOCOM are normally the forward months.