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Front month

The nearest-expiring, most actively traded futures contract for a product.

Rolling a futures position forwardThe March contract is sold and the June contract bought on the roll date, before March expires.5.004.754.504.254.00Contract price1 Feb15 Feb1 Mar15 Mar1 AprCalendar dateROLL DATEsell March, buy June the same dayMarch expiresMARCH CONTRACT (front month)JUNE CONTRACT (next up)Solid = the contract you hold. Dashed = the contract you do not.
Rolling a futures position forward. Every futures contract has an expiry date, so a trader who wants to stay in the market closes the front-month contract and opens the next one. That swap is the roll, and the two contracts rarely trade at the same price.

The front month carries almost all the liquidity and the tightest bid-ask-spread. Charts and quotes usually default to it. Later months are called back months or deferred contracts.

The price difference between the front month and later months reflects carry costs and expectations; see contango and backwardation.

Example: crude oil has contracts for every month for years ahead, but on a given day 80% or more of the volume is in the front one or two months.

Related: contract-month, roll, contango, backwardation

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