What does Nearby Month mean?
In futures market, the month of the futures contract closest to maturity is known as nearby month. It is also known as front month or lead month.
Futures Knowledge Explains Nearby Month
Nearby month or front month is the month nearest to delivery of the underlying asset under the futures contracts. It is the nearest traded contract month. In case of options, it is the month nearest to expiration. On the other hand, the term back month is used for delivery month farther away from the nearby month. In cash market, nearby month is the spot month. More contracts take place for nearby month than back months. Front month futures are relevant for back months’ price determination.