Back Months (Forward Months)

Definition

The term back months refers to any set of futures contracts for a given commodity that expire in a month that is different than the front month. Futures contracts will have a number of dates in the future during which contracts will expire.

Explanation

Also referred to as deferred months, distant months, and forward months, the back months for a given commodity are those contracts that expire in a month other than the front month, which is the next futures contract to expire. The settlement price specified on a futures contract for a back month may be the same as that of the front month; however, since the back month contract has a longer timeframe to expiration, it will likely trade at a different price.

Related Terms

breakaway gapblow off topblow off bottomfront month