For
futures contract
In finance, a futures contract (sometimes called a futures) is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The asset ...
s specifying physical delivery, the delivery month is the month in which the seller must deliver, and the buyer must accept and pay for, the underlying. For contracts specifying cash settlement, the delivery month is the month of a final
mark-to-market
Mark-to-market (MTM or M2M) or fair value accounting is accounting for the " fair value" of an asset or liability based on the current market price, or the price for similar assets and liabilities, or based on another objectively assessed "fair ...
. The exact dates of acceptable delivery vary considerably and will be specified by the exchange in the contract specifications.
For most futures contracts, at any given time, one contract will typically be traded much more actively than others. This is called variously the ''front'' month or the ''top step'' contract.
Financial contracts traded on US futures exchanges (such as bonds, short-term interest rates, foreign exchange and US stock indexes) tend to expire quarterly, in March, June, September and December. For financial contracts traded on non-US futures exchanges, the expiration schedule may not be quarterly.
This table lists the conventional letter codes used in tickers to specify delivery month:
To name a specific contract in a financial futures market, the month code will follow the contract code, and in turn be followed by the year. For example, CLZ3 is the December 2023
NYMEX crude oil
Petroleum, also known as crude oil, or simply oil, is a naturally occurring yellowish-black liquid mixture of mainly hydrocarbons, and is found in geological formations. The name ''petroleum'' covers both naturally occurring unprocessed crude ...
contract. CL denotes crude oil (crude light), Z corresponds to the December delivery month, and 3 refers to 2023.
References
External links
CME's reference of month codes
{{DEFAULTSORT:Delivery Month
Derivatives (finance)