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Back Month Contract

What does Back Month Contract mean?

A futures contract whose trading month of expiration is the farthest away. Hence this is also known as far month contract. The expiry month of this contract is beyond the next approaching expiration date.

Futures Knowledge Explains Back Month Contract

A type of futures contract that expires in any month after the nearest expiry date. For example, Google options are available that would be expiring in different months say June 2015 Options, July 2015 Options, August 2015 Options and so on up to January 2017 Options. The contract for June 2015 Options will expire at the next approaching expiration date. While June 2015 Options contract is known as font month contract, January 2017 Options which will expire last is known as the Back Month Contract.  With the passage of time, a back month contract becomes a front month contract.

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