What is the front month and how do I find it?
The front-month contract is the most liquid of futures contracts. You can find the correct front month by identifying the month with the highest volume. Below are links to the CME page you can use to verify the volume for permitted Futures products.
Learn more here: How do I identify the front month?
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How can I tell if I'm trading the wrong front month?
If you aren’t sure if you are trading the front month, some signs to look for are listed below. These could all be signs that you are trading a product that is expired, or about to expire:
low volume on the product you are trading
charts that look like they have incomplete data or a chart that is frozen
We also include any major rollover events in our Weekly Kickoff email. If you're signed up for our emails, you should receive a Weekly Kick-Off email letting you know of any important events that week, including contract rolls.
If you have already started trading in the expired month, you should finish out the trading day in that month, and then choose the new month the following trading day.
How do I change the contract month on my platform?
You should only trade the “front-month” contracts for all products. The front-month contract is the most liquid of futures contracts. The futures "rollover" is a period of time when one product month is going to expire, and longer-term traders who intend to remain in the position need to "offset" their position in the expiring contract month and reopen their position in the longer-term "new" contract month. Click on the link below and scroll down for instructions on how to change the month of the contract for your platform:
Why do I have to roll my contracts?
To protect against risk and avoid slippage, traders should trade the most active month. The most active month will be the product month with the most volume. This will start to shift to the new month starting on the date above. Follow the volume and you will be rolling into the most actively traded month.
How do I know when my contracts roll?
Unfortunately, there are NO specific dates when products roll! The roll happens when market participants move their positions from one contract month into another contract month prior to the front month’s contract expiration. This roll always happens in the days or even weeks prior to contract expiration. (You don’t want to take delivery of 1000 barrels of crude oil or one million bushels of soybeans, do you?).
Just like an athlete needs to know what quarter, inning, or period they are playing in, a trader needs to know what contract month they are participating in. As someone who is assuming risk in the marketplace, it is important to know your product intimately.
The volume will roll from contract month to contract month differently among futures products. It is important that you regularly check the volume in any market you are participating in. You may also notice that the size of the bids and offers on your DOM or ladder will start to decrease as the volume shifts to one of the deferred contract months.
Tip: Please don't expect a notification for each and every contract rollover. However, we do include notes about contract rolls for our most popular products in the Weekly Kickoff e-mails. If you are no longer receiving our e-mails, click here to re-subscribe. |
What happens if I trade the wrong contract month?
We understand that mistakes may happen, especially when contract months are rolling over.
If you have started the trading day trading the wrong contract month, make sure that you flatten that trade. You can then roll your contract to the front month (highest volume) and continue trading.
Please note that we do understand that mistakes can happen regarding which contract month you are trading. However, we require traders to be in the front contract month. Continued trading outside of the front month can result in issues with your trading account.