Front-Month Contract

The front-month contract is the futures contract with the nearest expiry date that is still actively traded. It normally carries the highest volume and the tightest spreads on the curve, which is why data providers and news headlines usually quote the front month when they refer to "the oil price" or "the index future". Brokers building CFDs on futures typically price them from the front month and then roll into the next contract as expiry approaches, since liquidity migrates there. Traders watching the difference between the front month and later months are reading the shape of the curve, which reveals whether the market is in contango or backwardation and how tight near-term supply is.