The front month refers to the futures contract with the nearest expiration date, typically the most actively traded and liquid contract in a particular commodity or financial instrument. Front month contracts usually exhibit the highest trading volumes and tightest bid-ask spreads, making them preferred instruments for hedging and speculation. These contracts are most sensitive to spot market conditions.

Front month contract behavior often differs from deferred contracts due to immediate delivery implications and spot market influences. As expiration approaches, front month prices converge toward spot prices through arbitrage activities. Many trading strategies focus on front month contracts due to their liquidity and responsiveness to current market conditions.

Real-world example: In crude oil markets, the front month WTI contract (nearest expiration) trades at $75 per barrel with high volume while deferred contracts show different prices and lower activity, reflecting current versus future market expectations.