What Is the Front Month? | How Do Futures Work?

The front month is the futures contract with the nearest expiration date for a given commodity or index, also called the nearby contract. It is usually, but not always, the most actively traded contract, and it is the one most news headlines mean when they quote “the price of oil” or “gold futures”.

How it works

Futures on the same underlying are listed for several delivery months at once. Crude oil on NYMEX is listed for many consecutive months; the E-mini S&P 500 trades in March, June, September, and December. At any moment, the contract that expires next is the front month. The ones after it are called deferred or back months.

When the front month expires, the next contract becomes the front month. That handover happens on a fixed schedule set by each contract’s rules.

An example

Suppose it is early November 2026 and you look at WTI crude oil futures. The December 2026 contract (code CLZ6) expires first, so it is the front month. The January 2027 contract (CLF7) is the second month. Once December trading ends in late November, January becomes the front month. The letters are month codes.

Front month vs most active

Traders often move to the next contract before the front month expires, to avoid delivery or thin trading near the end. For physically delivered contracts this shift happens around first notice day, when delivery notices can start. For a period, the second month can trade more volume than the front month. Data vendors therefore sometimes show the “most active” contract rather than the strict front month. Moving a position from one month to the next is rolling.

Why it matters

It is closest to spot. As expiry approaches, the front month’s price converges toward the cash price of the underlying. See basis.
It can behave strangely at the end. Near expiry, only traders able to make or take delivery should stay in a physically settled contract. The clearest example is April 20, 2020, when the expiring May WTI contract settled at minus $37.63 per barrel while later months stayed positive. See negative oil prices.
Charts can mislead. A “continuous” front-month chart stitches different contracts together. The jump at each roll is not a real price move.
The curve matters. The gap between the front month and later months shows whether a market is in contango or backwardation.

In short

The front month is the next contract to expire. It anchors headline prices and tracks the spot market most closely, but its last days can be thin and volatile, which is why most traders roll out of it before expiry.