Contract Months and Expiration

Unlike stocks, which trade indefinitely, futures contracts have a fixed life. Each contract is tied to a specific delivery or settlement month, and it stops trading on a set day. At any time, several contract months on the same asset trade side by side, each with its own price. Knowing how months are named, which month is most active and when each one expires is essential for placing the right orders and avoiding delivery.

Month codes#

Futures symbols combine a product code, a month letter and a year digit or digits.

Listing cycles#

The front month#

The front month is the nearest contract to expiry. It is usually the most liquid, but not always:

• Equity index futures: volume shifts to the next quarterly contract about a week before expiry, around the "roll date".
• Physically delivered commodities: speculators leave before first notice day, so volume moves to the next month earlier. See First Notice Day and Last Trading Day.

Traders usually trade the most active contract, which may already be the second month.

How expiration works#

Each contract has a last trading day set by its specifications:

On the third Friday of March, June, September and December, stock index futures and options and single stock options expire together, a day known as triple witching. See Options Expiration and Triple Witching.

Price differences between months#

Contracts for different months trade at different prices, reflecting financing, storage, dividends and expectations about supply and demand. A curve of prices across months shows contango (later months higher) or backwardation (later months lower). See Contango and Backwardation.

Rolling before expiry#

To keep a position beyond one contract's life, traders roll: they close the expiring contract and open the next one. The price difference between months affects returns, especially for long term holders. See Rolling Futures Contracts and Roll Yield.

Charts across expiries#

Because each contract expires, long price histories require stitching contracts together into continuous series, which can be done in different ways. See Continuous Futures and Back-Adjustment.

Common mistakes#

• Trading an illiquid month by accident.
• Forgetting the last trading day or first notice day.
• Comparing prices of different months as if they were the same instrument.

Frequently asked questions#

What are futures month codes?#

Single letters representing contract months, from F for January to Z for December, used in futures symbols.

What is the front month in futures?#

The contract closest to expiry. It is often the most liquid, though volume may move to the next month before expiry.

When do E-mini S&P 500 futures expire?#

On the third Friday of March, June, September and December, settling to a special opening quotation of the S&P 500.

Next, learn how margin works in futures in Futures Margin: Initial and Maintenance.