What is front month?
The front month is the futures contract on a given market that expires soonest and is still trading.
A futures contract is an agreement to buy or sell an asset at a set price on a set future date. Each market lists several contracts with different expiry months at the same time. The nearest of these is the front month. The later ones are called deferred or back months.
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Worked example (hypothetical)
Take crude oil futures, which are listed for consecutive delivery months.
| Point in time | Contracts trading | Front month |
|---|---|---|
| Early November | December, January, February… | December |
| After the December contract's last trading day | January, February, March… | January |
Crude oil has a detail that often confuses people. The December crude contract stops trading during November, before December begins, because delivery has to be arranged in advance. So "front month" means the nearest contract that is still trading. It does not mean the contract named after the current calendar month.
Volume also moves before expiry. In the days before the December contract's last trading day, most traders close it or roll into January. For a short period, January can be the most active contract while December is still technically the front month.
Precise definition and edge cases
- Formal sense: the listed contract with the nearest expiry or last trading date that has not yet expired. Exchanges sometimes call it the "spot month" or "nearby" contract.
- Front month vs most active: data vendors and charts often switch to the next contract when its volume overtakes the expiring one, before the official expiry. Check which rule a data source uses.
- Quarterly cycles: stock index futures usually list only March, June, September and December contracts. Here the front month is the nearest quarter, not the next calendar month.
- Delivery and settlement: physically settled contracts can carry delivery obligations near expiry. Many traders exit before then. See cash vs physical settlement.
- Curve shape: the price difference between the front month and later months shows whether the market is in contango or backwardation.
Where you see the term
- Charts and quotes: continuous futures charts usually follow the front month and splice in the next contract at each roll. This can leave a price gap on the chart that never traded as a single move.
- CFD instruments: a CFD on oil or an index may be priced from a futures contract and switched to the next contract on a schedule. Check the instrument specification and roll dates in your platform before holding a position over a roll. Leveraged CFD positions can lose money fast, and a roll can change the price shown on your chart.
- News and reports: a headline such as "front-month Brent fell" refers to the nearest Brent futures contract, not the physical spot price.
For the mechanics of switching contracts, see futures roll. For energy markets in general, see energies and stock indices.
Related terms
- Expiry date
- Futures roll
- Derivatives
- Forward contract
- Contract size
- Commodity
- Clearing and settlement
- Trading glossary
Frequent questions
What does front month mean in simple words?
It is the futures contract on a market that expires soonest and is still open for trading.
Is the front month always the current calendar month?
No. Crude oil contracts stop trading before their named month. Index futures follow a quarterly cycle, so the front month can be a later month.
Why do front month prices differ from later months?
Storage costs, interest rates, supply expectations and time to expiry all affect each contract differently. That gap shapes the futures curve.
Do continuous charts show real prices?
They show real prices for each contract. At each roll, though, the chart joins different contracts, so the gap at the join is not a real price move.
Does front month matter for CFD traders?
It can. If a CFD is based on a futures contract, a roll to the next contract can shift the quoted price. Check the instrument's roll rules before trading, and see risk management.