Front month contracts are generally the most liquid of futures contracts, in addition to having the smallest spread between the futures price and the spot price on the underlying commodity. Use of front month contracts requires an increased level of care, since the delivery date may lapse shortly after purchase, requiring the buyer or seller to actually receive or deliver the contracted commodity. Front month contracts are often paired with back month contracts to create calendar spreads.
Investment dictionary. Academic. 2012.
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front month — The nearest active contract month of a futures contract. See also spot month Exchange Handbook Glossary … Financial and business terms
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Back Month Contract — A type of futures contract that expires in any month past the front month futures contract. The price of the first back month futures contract is often used along with the front month futures price to calculate the calender spread. Also referred… … Investment dictionary
Delivery month — For futures contracts specifying physical delivery, the delivery month is the month in which the seller must deliver, and the buyer must accept and pay for, the underlying. For contracts specifying cash settlement, the delivery month is the month … Wikipedia
Near-month contract for energy futures — The near month contract, a term used in energy futures and options trading and other transactions, is the active contract with the shortest time to maturity. It is the contract that will expire first (often, but not always, within the next… … Energy terms