Kerosene: Tocom or C-Com
Posted: Tue Nov 18, 2008 1:03 pm
I have been thinking about adding kerosene to my portfolio and was looking at the differences between the contracts at the above two exchanges. The Tocom contract at 50 Kilolitres is five times the size of the C-Com contract at 10 Kilolitres. The latter looked more attractive to me since I want maximum granularity for profit taking purposes. Average daily volume in number of contracts traded is equivalent (although of course this represents 5 times more of the underlying product being traded at Tocom) but the chart for C-Com looks decidedly strange – so many locked limit days apparently, or at least days where there appears to be reasonable volume but little price movement.
Part of the reason appears to be the difference in trading methods at each exchange. C-Com has 6 trading sessions per day for each contract month but operates a session trading or auction method whereby a single price for each month for each session will be determined: the price will be juggled prior to each session until buy and sell orders match.
By contrast Tocom has two trading sessions per day and operates a continuous trading method throughout each trading session: the method we westerners are more familiar with. Hence on most days you get the more familiar pattern of OHLC all at different levels.
I still can not help wondering whether the strange price patterns and abnormally high number of days on C-Com where a single price is set for the entire day may not represent a high element of put throughs but await a reply from the exchange on this point.
Part of the reason appears to be the difference in trading methods at each exchange. C-Com has 6 trading sessions per day for each contract month but operates a session trading or auction method whereby a single price for each month for each session will be determined: the price will be juggled prior to each session until buy and sell orders match.
By contrast Tocom has two trading sessions per day and operates a continuous trading method throughout each trading session: the method we westerners are more familiar with. Hence on most days you get the more familiar pattern of OHLC all at different levels.
I still can not help wondering whether the strange price patterns and abnormally high number of days on C-Com where a single price is set for the entire day may not represent a high element of put throughs but await a reply from the exchange on this point.