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Nearby

• The nearest active trading month of a financial or commodity futures market. Related: deferred futures

 
 Embedded terms in definition
 Active
Commodity
Deferred futures
Futures market
Futures
Future
Market
Trading
 
 Referenced Terms
 Backwardation: A market condition in which futures prices are lower in the distant delivery months than in the nearest delivery month. This situation may occur in when the costs of storing the product until eventual delivery are effectively subtracted from the price today. The opposite of co tango.Is the market condition whereby the deferred or more forward delivery months are at a progressive discount to the spot or Nearby month. This is also known as an inverted market. This is opposite to a contango or carrying charge market.

 Horizontal spread: Is a spread which is composed of two puts or two calls on the same underlying instrument. It is called horizontal because both options have the same strike or exercise price but two different expiration dates. Generally, the trade is placed with the Nearby option sold and the deferred option purchased. This is an attempt to capitalize on the acceleration in time value decay for the nearby relative to the deferred contract month.The simultaneous purchase and sale of two options that differ only in their exercise date.

 Inverted market: A futures market in which the nearer months are selling at price premiums to the more distant months. Related: premium.Is the market condition whereby the deferred or more forward delivery months are at a progressive discount to the spot or Nearby month. This condition is marked by premiums for immediate or nearby deliveries. This is also known as a backwardation market. This is opposite to a contango or carrying charge market.

 Most distant futures contract: When several futures contracts are considered, the contract settling last. Related: Nearby futures contract

 Nearby futures contract: When several futures contracts are considered, the contract with the closest settlement date is called the Nearby futures contract. The next futures contract is the one that settles just after the nearby futures contract. The contract farthest away in time from settlement is called the most distant futures contract.

 
 Related Terms
 Nearby contract
Nearby futures contract

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